Homegrown Indonesian franchise branches out<\/p>\n
JAKARTA (JP): Sukyatno Nugroho never tires of telling the
\nstory of how his food franchise came into being 18 years ago.<\/p>\n
Or the fact that, with only a junior high school education and
\na class ranking of 40th out of 50, he has been able to branch out
\nwith franchises in 22 provinces and two foreign countries.<\/p>\n
\"My mother won a national contest to make the best es teler (a
\ntraditional drink of coconut, avocado, jackfruit, syrup, milk and
\nice) and I decided to take it from there by opening a small
\nrestaurant in a tent,\" he said recently at a Central Jakarta
\nhotel.<\/p>\n
In the early days, he added, it was difficult with the
\nrestaurant which eventually became Es Teler 77. He needed to get
\nup early in the morning to buy the fresh ingredients, the tent
\noften flooded or was raided by the police.<\/p>\n
But he persevered, and he had what he termed a \"trick\" in his
\narsenal to succeed. \"I sold my product as the 'Indonesian
\nchampion', which, of course, was intriguing to people. They came
\nin droves, and kept on coming back.\"<\/p>\n
By 1987, his business of selling the drinks and meatballs was
\nso successful that he decided to try his hand at franchising. He
\nacknowledged the initial effort was a case of learning by
\nexperience.<\/p>\n
\"There was no information on franchises in Indonesian at the
\ntime, so I couldn't read up on it, because my English is not so
\ngood, so I went with my own system through trying this and that.
\nThe first franchise was in Solo (Surakarta), and then a week
\nlater we opened in Semarang.\"<\/p>\n
He said he was able to iron out the initial difficulties and
\nthe reach of his franchises expanded.<\/p>\n
\"There were so many franchises at one point that I felt like
\nmy head was going to explode,\" Sukyatno said. \"We didn't know the
\nmanagement, the standardization, but we were pioneers.\"<\/p>\n
In 1994, he and his wife decided it was best to have all the
\nfranchises in shopping plazas and malls, a process which several
\nyears to realize. They also set standardization rules for their
\nfranchisees and opened a training center.<\/p>\n
Two years later, the firm opened Mie Tek Tek, a decision
\nSukyatno said was based on national pride as foreign fast food
\nchains devoured the local market.<\/p>\n
\"I'm an entrepreneur, but my hobby, including on the weekend,
\nis to go with my wife to shopping plazas. At the time we were
\nstunned that there were so many foreign companies around. I
\nremember my wife said why don't you open a restaurant, call it
\nMie Tek Tek, because you know the tastes of local people,\" he
\nsaid.<\/p>\n
\"Because for a foreign franchise, like Mexican food, maybe
\nfive million people know about it, maybe it suits the taste of
\n500,000 of them but only a few can afford it because it uses
\nexpensive foreign ingredients.\"<\/p>\n
With his experience from the two franchises, in 1997 he opened
\nRestoran Pasti Enak, specializing in fish dishes. It also was
\nimmediately sold as a franchise.<\/p>\n
He defined the segment as for all Indonesian people from all
\nwalks of life, with stores in such upmarket malls as Plaza
\nSenayan and Pondok Indah Mall as well as middle-range markets. It
\nis, after all, part of the company's logo: \"Proud to be a Product
\nof Indonesia.\"<\/p>\n
Crisis<\/p>\n
Sukyatno said the franchise was not as affected by the
\neconomic crisis, which reached Indonesia's markets in mid-1997
\nfrom Thailand and intensified as the year went on, as foreign
\nfranchises dependent on costly imports of raw materials.<\/p>\n
In fact, he added, his business perked up.<\/p>\n
\"I opened 50 new franchises during the crisis. We can't be
\ndragged down by people saying 'crisis, this, crisis, that'. In
\nfact, the crisis helped us in positioning and helped us
\nstreamline our operations.\"<\/p>\n
With consumers counting their rupiah like at no other time
\nduring the previously boom years of the 1990s, Es Teler 77 and
\nMie Tek Tek, with its menu of noodles and fried rice, found
\nitself with new consumers, he added.<\/p>\n
The franchises also stayed in business because they occupied
\nsmall spaces in malls, and thus were not saddled with huge rents.<\/p>\n
In vetting new franchisees, Sukyatno said he could identify
\nthe right candidate \"in five minutes. We have to be like police
\ninvestigators, asking them what we need to make a decision and
\ndeciding then and there. Where is their location? What is their
\npositioning? That is what we need to know\".<\/p>\n
Franchisees pay an initial fee, plus 4 percent of their
\nrevenue monthly.<\/p>\n
In the instances where there have been problems in the
\nfranchise relationship, he said he was able to settle the
\nproblems without resorting to the courts. \"I consider my
\nfranchisees to be family. We try to take care of things in a
\npersuasive way.\"<\/p>\n
It is a traditional franchise, he noted, because sometimes he
\nhad to understand if things did not go quite as planned with
\nsupplies.<\/p>\n
\"We have to be creative sometimes, because we are dependent on
\nthe seasons for many of our ingredients, like the jackfruit. I
\ndon't pretend to be like the big franchises, who can have
\neverything ready to order in their franchises.\"<\/p>\n
Franchises have been opened in Singapore, Malaysia and
\nMelbourne, Australia.<\/p>\n
\"Our stand in Australia has done so well, and 50 percent of
\nthe patrons are westerners. Part of the success has been the
\ntricks of our promotion, the fact that we can call ourselves
\nnational champion and that we have branches in Singapore and
\nMalaysia, too. People are impressed.\"<\/p>\n
Sukyatno said he was always looking for new opportunities,
\neven those which were out of this world. \"If there is a space
\nshuttle going into space, and there was a market there, I would
\nbe willing to set up my stores.\"<\/p>",
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