Bachelor of Science in Business Administration Major in Management

School of Management

University of Asia and the Pacific

“Feasibility Study on the Franchising of Pancake

House”

Submitted in Partial Fulfillment of the

Requirement for

MGT221: Entrepreneurship and Innovation

Submitted by:

Arayata, Abraham

Consebido, Norman

De Jesus, JB

Gonzales, Mark Paolo

Hermosa, Lorenzo

Pama, Ram Daniel

Tee Ten, Wayne

Uy, Mharc Kevin

Submitted to:

Mr. Eric Parilla

Faculty-in-charge

April 2017
Introduction

Marketing
I. Current Market Situation

A. PSIC Code
Item Code Description

Section 1 Accommodation and Food

Service Activities

Division 56 Food and Beverage Service

activities

Group 561 Restaurants and mobile food

service activities

Class 5610 Restaurants

Sub-Class 56101 Restaurants

​Table 1. Industry Classification (PSIC) from National Statistical Coordination Board

According to the Philippine Standard Industrial Classification Code (PSIC), Pancake House is
classified under Section 1 of Accommodation and Food service activities. Furthermore, it is
under Division 56 which is the food and beverage service activities. It falls under group 561
which is the Restaurants and mobile food service activities. It is under Class 5610 under
restaurants and sub-class 56101 of Restaurants.

B. Describe Industry

Franchising of Restaurants has been a common way of being an entrepreneurship for the
people who wanted to acquire the license of a particular franchise. With enough capital, a
franchisee could ask for the license and permission from the franchisor to grant a branch that
will operate according to the franchisee’s designated location. With the appropriate study
conducted and research regarding the market and the location, a franchise can be very
beneficial to the consumers and business owner if it becomes successful. Franchising, in
addition has been increasing in our country as the Philippines is considered to be the
franchising hub of Asia.
 Since the destruction that typhoon yolanda brought to Tacloban, the rise of the city became an
opportunity for business owners to open different types of businesses ranging from real estate
to restaurants. Restaurants being built varies from having their own concept to acquiring the
license of an established brand through franchising. The franchising of a food restaurant has a
room for growth since many brands are not yet established in the city of Tacloban, giving a
particular franchisee the monopoly of the brand if one is to be established. This, as a result, will
give the franchisee the whole market share of the people interested to buy the brand, thus, a
high probability of earning a high income.

Current Market Situations

Services They Want To Offer

The mission of the Franchisee is to open up a Pancake House that will become
profitable for the Taclobanons and to offer the variety of food that Pancake House has to
offer.

Services The Consumers Want To Avail

The consumers will want to avail the variety of foods that Pancake House has to offer
ranging from Pancakes & Waffles, Pastas, Salads and Tacos. In addition, with food products is
the ambience and the welcoming service of the employees that makes every customers feel at
home.

Socioeconomic situation of the area

Population
The population for Tacloban is 255,489. Tacloban’s population is estimated to increase by
1.73% annually.

Area
Tacloban has a land area of 201.72 km and has 45 barangays. Below is the list of barangays of
Tacloban

Barangays Located in Tacloban

Abucay Baybay Diit ​Libertad New Kawayan Rawis, Sagkahan San Roque, T. Claudio St.
Anibong Pleasantville Scandinavi
an subd.

Anibong Cabalawan El Reposo Lower Nulata ​Nula-tula Sagkahan Sagkahan Santo. Niño Tagapuro
Picas Mahayahay

Apitong ​Caibaan Fatima Magallanes Old Kawayan Sagkahan Salvacion Santo. Tigbao
Village Bliss Nino- GMA
Bagacay Calanipawan GE Palanog Marasbaras ​Palanog Sagkahan San Jose Sta. Elena Utap
Saging

Basper Camansinay ​Happy Land Naga-naga PHHC (Seaside Sagkahan San Paglaum Suhi V&G
& Mountainside) Mangga Subdivision

FAMOUS TOURIST DESTINATIONS

Tourist Destinations in Tacloban

1. San Juanico Bridge A monumental landmark, completed in 1973,

stretching from Samar to Leyte across the San
Juanico Strait. Considered the longest bridge in
the Philippines crossing a body of seawater at a
full length distance of 2.16km.

2. Santo Nino Shrine and Heritage Museum
One of the many presidential rest houses the
late President Ferdinand Marcos built in his
term, it is said that Imelda Marcos had it
constructed as the first family’s residence in the
city.

3. Leyte Landing Memorial Location where General Douglas MacArthur

landed with his Military troops in October 20,
1994. The shrine was erected on the red beach
named for the color of the sand drenched with
during the war.

4. Paruparong Bukid Nature Conservation A 30 minute drive from Tacloban City, located
Center in Brgy. Lukay Babatngon, Leyte, one can enjoy
kayaking, fishing, butterfly and bird watching in
this wellness center surrounded by green fields
and a great view of the mountains nearby.

5. Sto. Nino Church de Tacloban
Also known as the church of liberation, at the
corner of Real and Zamora streets it showcases
the stunning image of Seynor Santo Nino. A
prominent sight/location in the Tacloban
cityscape.

6. Leyte Provincial Capitol Building Built in 1907, it is influenced by neoclassical

architecture and very typical of American-era
government structures. It holds historical
significance in the Philippines because it once
briefly held the Philippine Commonwealth
 Government from October 23, 1944 to February
27, 1945.

Enterprises Around the Area

Indirect Competitors
KFC

Mang Inasal

Jollibee

Bagnet and Beyond

Greenwich

BonChon

DIrect Competitors

Kuya J. Shakey's Canto Fresco

Iceberg Rai Rai Ken Hi-side

HapChan Gerry's Grill Hukad

Ginger Wok Mex Em Up Max's

II. Issues and Opportunities

 A. Opportunities

Franchisor's Perspective

1. Expansion
It is an opportunity for the Franchisor to expand the name of Pancake House to
the different parts of the country due to the franchisee’s desire to license the name of the
franchise and put it in other regions.

2. Less Expense
Since it will be a franchise, the franchisor will have less expense putting up the
name of Pancake House. The franchisee will be the one to shoulder the expenses in terms of
equipment and operations.

3. Time
It saves the franchisor time because the construction, operation and the
maintenance of the restaurant will be the responsibility of the franchisee.

Franchisee’s Perspective

1. Established Market
It will be easier for the Franchisee when it comes to promoting the products since
the reputation and image of Pancake House is already established and the awareness of the
customers is high.

2. Buying a brand name

Pancake House has already established a strong brand name among the food
industry. Hence, it will be easier for the Franchisee to have support from the consumers.

3. Assistance from the management

The training and procedures in operating the business model is already provided
by the Franchisor. The Franchisee will just have to follow it to have a consistency in producing
the products and service for the customers.

B. Issues
Franchisor's Perspective

Quality Assurance
One issue is the quality assurance and consistency. Since Pancake House will
be a franchise in another region, it will be hard to keep track on the performance of the
restaurant due to its distance. Though the performance of a franchise can be tracked or
be evaluated through a mystery guest, it can provide inconsistency since a mystery
guest doesn’t evaluate the restaurant’s quality everyday and importantly, the mystery
guest can only evaluate to the extent of the restaurant’s dining area since a guest won’t
be allowed to visit the kitchen area.

Franchisee’s Perspective

Start-up Challenge
The franchisee would have to contest his way to survival since it’s going to be the
first Pancake House in Tacloban. A lot of food businesses are already established in the
area so it would be up to the franchisee on what specific strategies they will use to battle
their competitors. They will need to duly promote their main product, pancakes, to be
worth their money.

Competition
Considering that pancake house would open its first branch in Tacloban, other
food businesses will be a competitor. It is integral in the franchisee’s strategy to capture
its target audience to remain competitive. The company must establish a pleasing and
inviting image to the consumers around the area to compete with businesses that were
already there before their arrival. It would be up to the franchisee on what strategies to
consider in order to compete with other food businesses around the area.

Strict Product Rules

Knowing that Pancake House has their own specific ingredients in order to
differentiate their products from the others, the franchisee will need to cope up with the
costs. The franchisee would need to line up expenses for the franchise to be profitable.
Knowing that quality is a huge factor for Pancake House, it is a must for them to live up
its brand.

Analysis: ​Opening a franchise has its positive and negative effects for both the franchisor and
franchisee. For the franchisor, it is an advantage to open a franchise to enable growth and to
spread brand awareness without having to invest a big capital for the location and construction,
etc. but with the exchange of the potential for profitability. The franchisee on the other hand, is
able to have an established brand that, compared to an entrepreneur’s own concept, has a
lower risk of failing. Nevertheless it still would hinder the Franchisee’s ability to develop the
restaurant on his/or her own nor make big decisions regarding the brand’s offerings or image.
They will not be able to innovate and apply his own concepts due to the strict established
policies for the franchise that requires strict compliance.

Competition (Direct Competitors)

Name of Pricing Place Products
Competitor

Mang Inasal Robinsons Place Chicken:

P99 (solo) Tacloban SM1 - 1pc chicken w/rice
P109 (w/ drink)
SM1.5 - 1pc paa Spicy w/rice
P99 (solo)
P109 (w/ drink) PM2 - Pecho w/rice

P99 (solo) SM2- Pork BBQ

P112 (w/drink)

P99 (solo) PM5 - Pork Sisig

P109 (w/ drink)

P99 (1-rice) PM4 - Bangus Sisig

P109 (unli-rice)
PM6 - Bangus Inihaw
P99 (solo)
P109 (w/drink)

P99 (solo)
P109 (w/drink)

Greenwich Robinsons Place ​ asagna Supreme:

L
Tacloban -Chicken plate
P150
-Full size w/drink
P110
-Snack size w/drink
 P90
-Full size

P100 -Snack size

Creamy Carbonara:
P80 -Chicken plate

-Full size w/drink

P150
-Snack size w/drink
P110
-Full size
P90
-Snack size
Spaghetti Supreme:
P100 -Chicken Plate

P80 -Snack size w/drink

-Snack size
P130 Very Cheesy Macaroni:
-Chicken Plate
P65
-Snack size w/drink

P50 -Snack size

P150

P90

P80

KFC Robinsons Place ​ ANDWICHES:

S
P50 Tacloban -Junior Zinger

P50 -Junior Original Recipe

-Classic Chicken Burger

P36
 -Zinger
SNACKS:
P95 -Spaghetti

P54 -Junior Bucket of Fries

P62 -Fully Loaded Bucket of Fries

-Snackbox
P150
-Large Hotshots

P62 -Regular Hotshots

P107 -Famous Bowl

P63 -Regular Funshots

-Large Funshots
P50 INDIVIDUAL MEALS:
-Chicken w/Spaghetti
P63
-Tokyo Pepper Steak Rice
Bowl
P107
-1pc. Chicken Meal

P100 -2pc. Chicken Meal

-Ala King Rice Bowl

P99
-Teriyaki Rice Bowl

P85 -Flavor Shots Mushroom

Gravy
FULLY LOADED MEALS:
P145 -1pc. Fully loaded box

-Duo box 3pc. Combo

P99
-Spaghetti Fully loaded box
 P99 -2pc Fully loaded box

-Duo box shot combo

P50
-Shots fully loaded box

P112

P299

P130

P175

P299

P155

Shakey's Robinsons Place STARTERS:

P248 (6pcs) Tacloban -Buffalo Wings
P336 -Calamari Crunch
-Captain’s Choice
P433 -Wings n’ Rings
-Garlic Parmesan Fries
P410 -Basket of Belgian Fries
P225 -Basket of Potato Chips
-Basket of Mojos
P196 -Mojos n Dip
-Cheesy Garlic Bread
P183 -Classic Loaf
SOUP & SALAD
P295 -Chicken n Corn Soup,
P133 Creamy Mushroom Soup,
P110 Hearty Italian Soup
-Chili Con Carne Soup
P103 -Seafood Chowder
 -Chef’s Choice salad, Greek
P87 Salad, and Tuna Caesar
Salad

CHICKEN:
-Solo pack
P110 -Buddy pack
-Family pack
P110 -Party pack
-Blowout pack
P167 (solo) P282 PASTA:
(Family) -​Mediterranean Tuna Pasta
-Carbonara Supreme
-Classic Spaghetti
-Baked Italian Sausage
Penne
P245 - Monster Spaghetti Meatballs
P495
P665
P1098
P1872
- Prima Lasagna
P226
- Seafood Marinara
P203(solo) WHOLESOME COMBOS:
P400(platter) -Bunch of Lunch
P180(solo) -Hero classic
P365(Platter) -Hero Meatball
P226 -Salad, Chicken n’ Pizza
-Super Platter Meal
P222(solo) DESSERTS:
P458(w/2 monster -Banana Peach Sunrise
meatballs) -Banana Split
P491(w/3 monster -Marble Brownie ala Mode
meatballs -Raisin Oatmeal Cookie A la
P216(solo) Mode
P637 (platter) -Sundaes
P257

P197
 P163
P163
P192

P267

P199

P179
P199

P109

P59

Jollibee P50 - 165 Robinsons Place ​ ALUE MEALS

V
Tacloban Burgers & sandwiches,
Chicken, noodle and rice,
Breakfast

Rai Rai Ken P60-379 Robinsons Place Ramen, Tempura, Sashimi,

Tacloban Tori Karage, Chicken Curry,
Maki, Gohan, Miso Soup,
siomai

Unaju

P525
Kuya J. 95-695 Robinsons Creamy Seafood and Corn Soup
Place Tacloban
Pochero Bulalo Tagalog

Kuya J’s Bulalo

Chorizo Dinamitas

Sinuglaw

Lumpia Presko

Sizzling Pork Chops

Sizzling Bulalo

Sizzling Sisig w/ Egg

Grilled Scallops

Kuya J’s Krispy Pata

Kare-Kare

Deep-Fried Tuna Belly in Chili

Sauce

Canto Fresco 125-400 Robinsons

Place Tacloban

Iceberg 128- Robinsons Soups

Place Tacloban
Salads
 Rice Meals

Sizzling Meals

Pasta

Parfaits

Ice Cream

Bagnet and 85-340 Robinsons Assorted Bagnet Rice Meals

Beyond Place Tacloban
Filipino Rice Meals

Hi-side 140-300 Robinsons

Place Tacloban

Gerry's Grill ​115-635 Robinsons Grilled Meals

Place Tacloban
Seafood

Soups

Pika-Pika

Filipino Food

Hukad ​39-635 Robinsons ​Soups

Place Tacloban
Pika-Pika

Salads

Seafood Platters

Meat Dishes

Ginger Wok ​150-300 Robinsons

 Place Tacloban

Mex Em Up ​115-455 Robinsons Mexican Food

Place Tacloban
Pasta

Sandwiches

Soups

Max's ​38​-​729 Robinsons Chicken/Chicken Meal

Place Tacloban
Sandwiches

Filipino Cuisine

Soups & Salads

All-day Breakfast

Seafood

Pancit

Pastries/Desserts

BonChon 55-399 Robinsons Bibimbowls

Place Tacloban
Chicken Meals

Rice Meals

Calamari

Sandwiches

Hap Chan 50-440 Robinsons Dimsum

Place Tacloban
Congee

Noodle Soup

Chinese Food
 Rice/Noodle Meals

Market Share

Name of Stores Estimated Sales per day Market Share

Mang Inasal 130,000 7.67

Greenwich 150,000 8.85

KFC 220,000 12.98

Shakey's 130,000 7.67

Jollibee 240,000 14.16

Rai Rai Ken 45,000 2.65

Kuya J 130,000 7.67

Canto Fresco 50,000 2.98

Iceberg 65,000 3.83

Bagnet and Beyond 35,000 2.06

Hi-Side 35,000 2.06

Gerry's Grill 90,000 5.31

Hukad 55,000 3.24

Ginger Wok 35,000 2.06

Mex Em Up 35,000 2.06

Max's 90,000 5.31

Bonchon 90,000 5.31

HapChan 70,000 4.13

Total 1,695,000 100.00%

(All estimated Sales are given by the management office of Robinsons Place Tacloban)
Market Demand

Foot Traffic Results

Analysis: ​There are more people during the Weekends compared to Weekdays in the mall.
Total demand is equal to 29092 per month.

Target Market

Pancake House is a fine dining restaurant, it provides a comfortable ambience to everyone

wanting to spend time with colleagues and friends, an accessible place to do business
meetings, and have group studies. Pancake House’s main target are people living in the
Tacloban area. The market targeted are those between the ages of 20-80. As a general
assumption, most people in their 20s, are in the workforce and have enough buying power to
afford the product offered by Pancake House. The target market reaches until the age of 80
since Pancake House’s product offerings target almost everyone regardless of age. Since the
products of Pancake House are priced at a slight premium above other fast food restaurants,
our target market are those belonging to Class AB since they have a more sustainable buying
power.

Target Market Demographic Geographic

Businessmen, Workers and Ages 20-60 People living in Tacloban

Employees Male and Female and nearby municipalities
Class AB and C
Computation for demand:
To compute for the demand, we computed 29092 and multiplied by the percentage of those who
are willing to try and those who are willing to buy.

The total demand is 6,051.

Positioning Statement
The positioning statement for Pancake House is:

“To enhance customer brand involvement to consumers of classes A and B regardless of

age, Pancake House ensures quality products of various cuisines ranging from
American, Filipino, Italian, and Spanish dishes in respect to a quick and accommodating
service.”
Marketing Mix

Product and Price

PANCAKES AND WAFFLES

PANCAKES

FOOD QUANTITY PRICE (Php)

Classic Pancakes 2 pcs. 145

3 pcs. 179

Cheese Pancakes 2 pcs. 170

3 pcs. 195

Banana Pancakes 2 pcs. 170

3 pcs. 195

Chocolate Marble Pancakes 2 pcs. 180

3 pcs. 205

Chocolate Chips Pancake 2 pcs. 180

3 pcs. 205

Walnut Pancakes 2 pcs. 189

3 pcs. 215

Blueberry Pancakes 2 pcs. 189

3 pcs. 220

Caramel Banana Walnut Pancakes 2 pcs. 189

3 pcs. 220

Sunrise Orange Pancakes 2 pcs. 219

3 pcs. 265

Classic Country Pancake Medley 265

 Bacon and Cheese Pancake Medley 299

WAFFLES

FOOD QUANTITY PRICE (Php)

Bacon Waffle 1 199

Caramel Banana Walnut Waffle 1 205

Cheese Waffle 1 189

Chocolate Marble Waffle 1 189

Golden Brown Waffle 1 180

Peach Waffle 1 195

ADD-ONS

FOOD QUANTITY PRICE (Php)

Country Sausages 4 pcs. 110

Crispy Bacon Strips 4 pcs. 115

BREAKFAST

FOOD PRICE (Php)

Cinnamon Toast 100

French Toast 145

Country Breakfast 250

Perfect Match 275

Pork Tocino 219

Longganisa 219
 Beef Tapa 259

Smoked Golden Tapa 265

Daing Na Bangus 299

Ham and Cheese 165

Omelette

Mushroom Omelette 165

Spanish Omelette 175

SOUPS & SALADS

SOUPS

FOOD PRICE (Php)

Mushroom Soup 96

Potato Bacon Soup 96

Taco Soup 96

Almondigas Soup 115

SALADS

FOOD PRICE (Php)

Caesar Salad 199

Fiesta Taco Salad 249

Hearty Chef's Salad 229

Warm Bacon Potato Salad 175

Shrimp-Mango Salad 305

 MAIN COURSE

FOOD QUANTITY PRICE (Php)

Classic Pan Chicken 2 pcs. 199

3 pcs. 255

Pan Chicken and Golden Bown 1 pc. 235

Waffle
2 pcs. 309

Spicy Chicken Fillet with Brown

Rice 219

Steamed Fish in Mintsai Sauce 239

Hot Roast Chicken 250

Fish Rolls 255

Adobo Sulipan 255

Arroz A La Cubana 255

Pork Vienna 255

Special Salisbury Steak 255

Pan Grilled Pork Belly 260

Home-Style Bangus 279

Hot Roast Beef 289

Salmon Fillet 389

Steak and Eggs 489

Mac'n Cheese with Bacon 144

Spaghetti with Meat Sauce Regular 189

Large 295

Carbonara 279
 Seafood Gambero 309

SPECIAL SETS

FOOD PRICE (Php)

Spaghetti Club Special 245

Set

Pan Chicken Special Set 260

House Special Set 270

Hamburger Steak 270

Special Set

Roast Beef Special Set 289

SIDE ORDERS

FOOD PRICE (Php)

Plain Rice 40

Garlic Rice 45

Toasted Bread 40

Butter and Jam 45

Potato Salad 80

Mashed Potato and

Gravy 80

French Fries 80

Hash Brown 45
 SNACKS

FOOD PRICE (Php)

Best Taco in Town 119 (1 pc.)

Best Tuna Macaroni 145

Salad

Potato Salad 145

Grilled Cheese 155

Sandwich

Tuna Sandwich 165

Grilled Ham and 195

Cheese Sandwich

Bacon, Lettuce, and 205

Tomato

Chicken Sandwich 209

Club Sandwich 279

Jumbo House Burger 299

DESSERTS

FOOD PRICE (Php)

Scoop of Ice Cream 60

Mini Pancakes Classic 100

Mini Pancakes with 115

Candy-Coated Choco
Bites

Halo-Halo Jubille 100

Halo-Halo Jubilee with 115

Ice Cream
 Mango Crepe with Ice 185
Cream

Jumbo Banana Split 225

Waffle Foldover 225

KID'S CORNER

FOOD PRICE (Php)

Kids Mac and Cheese 92

Children's Classic Ala 100

Carte

Small Soldiers Classic 100

Mini Pancakes

Mini Pancakes with 115

Candy-Coated Choco
Bites

Spicy Chicken Bites 128

Classic Chicken Bites 128

Slice N' Shine 165

DRINKS

TYPE PRICE (Php)

Freshly Brewed Coffee 85

Freshly Brewed Coffee 105

with Refill

Decaf Coffee 85

Hot Cappuccino 90
 Hot Tea 55

Belgian Hot Chocolate 130

Fresh Milk 75

Milkshakes Regular 120

Milkshakes Extra Thick 135

Rootbeer Float 115

Orange Freeze Float 115

Minute Maid Juice 55

Calamansi Juice 65

Orange Juice 75

Pinapple Juice 75

Four Seasons Juice 80

Bottled Water 50

Botomless Iced Tea 80

Soda in Can 70

House Iced Tea 65

Source: Pancake House Inc.

Analysis:​ Based on the latest available products in the Pancake House menu, the company
shows that they have a wide variety of choices for their customers. They offer American,
Filipino, Italian, and Spanish dishes. This current menu is designed for their customers to try
different and unique types of food. Their products are ranging from Php 96 to Php 489 excluding
the desserts and drinks. The restaurant also has a category on the menu wherein customers
can choose a combination of different products which is called the "Special Sets". In addition,
they also offer a different menu suited for children tastes.
Branding

​ ancake house was recently bought by Max Group Inc. According to the Executive Director
P
and Chief Marketing Officer Jim T. Fuentebella they will be having 15 renovations of existing
Pancake Restaurants and additional 15 new branches.
Max group Inc. decided to bring back the old ambiance of Pancake house restaurant.
They wanted to change it into wood accents, plush furniture and warm lighting. They based their
ambiance from the three words that best describes Pancake House Restaurant, shack
(functionality), shelter (comfort), and shed (accessibility).
For the logo, they also overhauled the logo ​now shows a new interpretation of its famed
house symbol that complements its old orange background. Max Group Inc. will not change the
color mainly because according to the core of Pancake House these colors represent the spirit
of 1970s. The company wanted to bring back the work culture such as ambiance, logo, and
experience of the customer.
Product life cycle

There are four stages in the product life cycle. The introductory, growth, maturity, and
decline phase. Based on the definitions of these phases, Pancake House falls between the
maturity and the decline stage. When the profit trend becomes flat, it’s an indicator that it’s
already in the maturity stage. Prices will be lowered and advertisements must be increased to
compensate with the loss. It could still generate cash-flow through loyal or repeat customers,
etc.

According to the data gathered, Pancake House is already between the maturity and
decline stage. Even though it’s still generating income, the company is experiencing some
decline. According to the net income ratio of Pancake House last 2013-2014, it plummeted from
4.51% to -2%. The company’s growth is lbeing hindered by its sales since it was the first
restaurant to cater pancakes and waffles to a country accustomed mostly to rice-based food. It
is showed some progress when it purchased Yellow Cab pizza chain back in 2011 with a
whopping P800 million. Although, the company is having small to negative profit as the years
passed. Their financial condition further proved that they are already in the maturity stage
because of their stable profit. Pancake House is not generating huge amounts of income but
rather just enough for the break-even or a small percent increase from the previous. An
example of this is when their total assets grew from P2.89 billion to P2.92 billion as of the year
2012 and 2013 respectively.

Going to the number of branches of Pancake House, their branches increased from 104
in the year 2013 to 114 in 2014. They used strategic planning to set up their branches. Pancake
house considered a lot of factors to establish their location. Since they are focusing in casual
dining and caters to social classes A and B, they put outlets near offices, school, supermarkets
and residential areas. It’s important to them to locate their store where it is easily accessible by
car or by foot traffic. They give less importance in locating near public transports.
Pricing Strategy
Basis of the price

Just like other restaurants Pancake house uses these strategies to set their price and
against their competitors. ​First​, they gather their recipes for each menu item. The recipes
should list specific ingredient quantities, brands and the number of servings the recipe makes.
Second​, they should determine the price for every ingredient in all recipes specific to the
quantity required. Include condiment costs such as salad dressings, parmesan cheese or other
toppings commonly added by the customer into the cost structure. If multiple dish options are
provided, base the prices off the highest cost ingredients. ​Third​, they should create a pricing
sheet for each menu item. Summarize the cost of ingredients for each recipe, then divide by the
number of servings each recipe offers. If entrees come with sides, bread or other add-ons,
include the unit serving price with the cost of the entree for a total menu item cost. ​Fourth​, they
add all of their standard monthly expenses. Include labor, rent, cleaning costs, supplies,
insurance and all other routine expenses. If costs fluctuate, use the highest average cost. ​Fifth​,
they determine the average number of customers that come to their restaurant. If they don't
have an accurate count, they substitute the number of entrees ordered for customers. ​Sixth​,
divide the total monthly expense by the average number of customers to determine the amount
of your expenses that each customer order must cover. ​Seventh​, they add the per customer
expense to each menu item on their pricing sheet. A total cost per menu item should be listed at
the bottom of each pricing sheet for reference. ​Eighth​, they determine the percentage of profit
they want to make on each item. They consider testing profit price points by multiplying 1.1 (10
percent), 1.2 (20 percent) or 1.3 (30 percent) by the total expense to illustrate the cost of each
menu item. Compare prices with similar restaurants in the area. Select a profit level that meets
their needs, but is priced competitively. ​Ninth​, they should set menu prices by multiplying your
profit percent markup to the total cost of each menu item listed on the pricing sheets. ​Lastly​,
they update pricing sheets on a regular basis to ensure their profit margins are maintained.
Also, update menu prices as needed.
Place
Pancake House continues to expand its branches through franchise and company
owned stores. If feasible, the Pancake House in Tacloban will be the first branch in the whole
Region VIII​, giving the franchisee the whole market of consumers wanting to avail the product of
Pancake House.
Promotion of Pancake House
Promotion is one of the elements of the marketing mix. It is a way a company raises
customer awareness, sales, and brand loyalty. The most common ways of promotion are
through advertising, personal selling, sales promotion, direct marketing, and publicity.

Pancake House (Max's Group Inc.) Strategy

Pancake House promotional strategy comes from their parent company, Max's Group
Inc., wherein the company wants to have a strong and large network of casual dining
restaurants. Pancake House, along with the other restaurants of Max's Group Inc., strategically
locate themselves where there are high foot traffic and a steady flow of potential customers.
Pancake House strategically assures that they are present in every major mall in urbanized
cities. This is one of the most important ways on how the restaurant promotes itself which is to
be strategically located where there are many potential customers.

Types of Promotion of Pancake House

1. ​Advertisements
Printed Advertisements - This is the most common promotional technique Pancake House uses.
The restaurant is often featured in newspapers, food and lifestyle magazines where the
restaurant is being talked about. Pancake House shares fliers with other Max Group Inc.
restaurants where if you deliver food to your house from any restaurant from the parent
company, they will give you a flier containing the menus of the other brands.

Billboards - Pancake House has also used billboards in the past giving awareness people
passing by highways

2. ​Sales Promotion
Often times, Pancake House has sales promotion where they sell their products cheaper/ at a
fraction of the normal cost. Currently, they are offering to sell 2 select meals at a fraction price.

3.​ Word of Mouth/Social Media

Social Media - The restaurant has social media where it is able to communicate with the people

Website - Information on the restaurant and the company is available online.

Operations

HR Requirements

Restaurant Manager are responsible for overseeing the efficient running, cost-effectiveness of
the restaurant, and for managing their employees. They need to be able to lead as well as work
as part of a team.

Kitchen Supervisor are the employees that are leading a small crowd of kitchen porters and
overseeing the day to day running of the kitchen, including cleaning the equipment, and making
sure that supplies of the restaurant are on check.

Dining Supervisor is responsible for providing food to customers under sanitary conditions as
directed and in accordance with established policies and procedures.
Dining Staff waiter or waitress who are typically part of a wait staff. They serve the food to
customers and take their orders.

Kitchen Staff are responsible for the different operations that happens in the kitchen. They are
responsible in the cooking of the products ordered by the customers as well as maintaining the
quality of the kitchen equipments inside.
Bibliography:

TOP PICKS: 10 THINGS TO DO IN TACLOBAN CITY (Tourist Spots, Attractions

and Things To Do and Experience). (n.d.). Retrieved April 06, 2017, from
http://www.pinoyadventurista.com/2013/08/10-things-to-do-in-tacloban-city-leyte.
html

Pancake House. (n.d.) Retrieved April 7, 2017, from

https://www.pancakehouse.com.ph/

Socioeconomic classes. (n.d.) Retrieved April 7, 2017 from,

https://www.pinoymoneytalk.com/sec-abcde-percentage-population/

Tacloban. (n.d.) Retrieved April 7, 2017, from http://tacloban.gov.ph/