S'pore franchisers look for greener pastures in RI

S'pore franchisers look for greener pastures in RI

Tony Sitathan, Contributor, Singapore

Who would have guessed that Singapore, known for its image as an
international export, trading and travel hub is fast emerging as
a regional franchise hub exporting its own delectable concoction
of food and beverage franchises in Asia.

And there is no greater proof of success than looking at the
number of Singapore franchisers that have quietly taken root in
Indonesia.

In less than two years more than a dozen F&B franchisers have
decided to tie the knot with entrepreneurial Indonesians by
awarding them master franchisee contracts so that they can roll
out several outlets in their designated territory within an
acceptable timeframe.

According to Terry Wong, the General Manager of the
Franchising and Licensing Association (FLA) Singapore, formerly
known as Singapore International Franchise Association (SIFA)
more than 40 percent of the existing franchisers of 160-odd
members in FLA are in the F&B industry.

And in order to promote Singapore as the franchise hub in
Asia, the FLA takes its role religiously and organizes events and
trade shows like the Global Franchising Licensing seminars.
"Franchising is much more than appointing the right franchisee.
It is the active promotion and protection of intellectual
property rights and working collaboratively where both the
franchiser and the franchisee share equal responsibilities and
risks as well as rewards. Hence branding, licensing and even
joint ventures are considered part of the franchising
experience," she revealed.

Like it or not the franchise arrangement is indeed a marriage
of convenience for both parties. The franchiser does not have to
worry about capital outlays to spread their brand name abroad.
There is also reduced risks for the franchiser that is often
unsure of the local market conditions or the inability to
understand the local culture in a foreign country.

The local partner or franchisee on the other hand benefits by
having a ready proven business or formula that actually makes
money as well as benefiting from the technical know-how and
expertise in setting up and running a business especially so if
the entrepreneur is a rookie in managing their own business.

According to Jean Lee, the managing director from Cavana
Chicken under the Carona Holdings Pte Ltd, the importance of
having the right business partner cannot be underestimated when
building or breaking a brand overseas.

"We have built a very strong foothold relationship between our
master franchisee in Indonesia and it has developed beyond just a
Master Franchiser and Master Franchisee relationship. We fully
assist them in all areas of setting up their new restaurants.
From site selection, design and renovation, menu planning and
customization, advertising & promotion and all related training,"
she said.

It is this attention to detail and often visiting Indonesia
has reinforced their strong business ties with their partners.

In less than a year their Indonesian franchisee has set up
three restaurants in Indonesia and another one is on the drawing
board. It took Jean a long time before selecting the right
franchise partner in Indonesia.

"It was not an easy task but in the end we decided to choose
someone who had little experience in the food and beverage
industry or even in the retail business. What the partners lacked
in skill was made up by their credibility and loyalty to the
Cavana brand name," she revealed.

The one common thread that runs through any successful
franchisee is the passion for excellence and an uncompromising
attitude. Most of the Indonesian entrepreneurs who believed in an
idea feel passionate about it.

When Breadtalk, a lifestyle boutique bakery that has taken
Singapore by storm since it first opened in 2000, felt that there
was no room for expansion after opening 24 outlets in Singapore.
For its first expansion plan overseas it looked no further than
Indonesia. It was snowed under with more than 500 enquiries
interested in being the franchise holder.

According to Frankie Quek, the Group General Manager of
BreadTalk Group Limited, now a publicly listed company in
Singapore, it was a strenuous tasks selecting and prequalifying
the applicants.

"We were, however, looking for like-minded individuals who
shared our business philosophy, and dedicated to ensuring that
BreadTalk would live up to its brand spirit. We finally decided
on the Johnny Andrean Group, which is well-known locally in the
fashion circles.

"It didn't matter to us that Johnny did not have any
experience in the F&B industry. What impressed us was his
relentless pursuit to take BreadTalk to a higher plane and his
personal conviction to even do better than BreadTalk Singapore,"
he said.

True to his word, BreadTalk Indonesia since it opened last
year has done roaring business; its best outlet does better sales
than BreadTalk Singapore by a ratio of two to three times.

Frankie credits Johnny's energy and conviction that has
propelled BreadTalk Indonesia to its current level of success.

Johnny Andrean has plans to take BreadTalk on a regional
blitzkrieg besides Jakarta starting with Bandung, Medan, Surabaya
and Bali.

"My guiding business philosophy is based on team building, a
conducive learning culture, innovative value, customer focus and
trust and integrity. And to excel in this business, one needs a
lot of creativity because BreadTalk is more than bread but a
lifestyle brand," he said.

Johnny Andrean's unbridled creative energy is seen to be
driving force behind the seven outlets in Indonesia with plans to
extend beyond the Java island.

What is rather amazing still is the ability of the humble
"kaya" which is made from coconut milk, eggs and pandan flavoring
spread on toasted bread to be a well accepted staple fare in
Indonesia. Ya Kun Kaya Toast started from simple beginnings in
1944. It started off as a coffeestall that was named after the
late patriarch Loi Ah Koon.

Adrin Loi, the son and current executive chairman of Yakun
International Pte Ltd, has decided to add a brand new chapter to
the art of eating kaya toast. He currently runs 15 outlets in
Singapore, out of which eight are actually franchised out while
seven of them are corporate owned. Not content with Singapore, in
less than one year, together with his Indonesian counterpart, he
managed to open six franchise chains in Indonesia.

Although the portion of the Indonesian sales currently only
account for 5 percent of its annual revenue, he expects this
figure to increase over time. He is also looking to expand
regionally into Malaysia, Taiwan, South Korea, Japan and Hong
Kong. He also revealed that before he made a foray into Indonesia
he was assisted by IE (International Enterprise) Singapore.

He was given grants claiming up to 70 percent of the total fee
incurred for the feasibility country-wide study. He was also
reassured by the fact that several Singaporean franchises have
started to mushroom in Indonesia. Tung Lok, Coffee Club,
PastaMania, Crystal Jade were some of the first few successful
market entrants.

Like all newcomers he also faced his fair share of challenges.

"I had to educate the locals of our core product -- the kaya.
The other challenge was finding the same or similar ingredients
we currently use in Singapore to ensure product quality and
consistency," he added.

His ultimate vision is to establish Ya Kun as a household
name.

For Daniel Tay, the chef and managing director of Daniel Tay
Bakerzin, a well known confectionery and dessert cafe similar to
exclusive hallmark bistros in Europe, believes very strongly in
the dessert culture that is slowly creeping up on Asians. He is
so impressed with the entrepreneurial culture in Indonesia he
says without blinking that Indonesians are a lot more
enterprising than Singaporeans and where true entrepreneurs are
made rather than born.

"The Indonesians have a basic concept where you do business to
be rich, not to work for someone else. And that is something that
they learn when they are young."

When he ran his business in Singapore, and needed money to
expand his Singapore operations, his existing master franchisee
from Indonesia, Kusnadi Radhaja, was so impressed and convinced
of the dessert culture that was fast emerging in Asia, he decided
to buy a stake in the holding company, Pacific United Holding.

Bakerzin is found in Thailand, Malaysia, Indonesia and
Singapore with plans to enter the U.S. market. And all his
franchisees' overseas, even in Thailand and Malaysia, are owned
by Indonesians.

As a chef, his eye for uncompromising quality is well known
among those that know him personally. When the Indonesian kitchen
once ran out of imported chocolates that is used as a main
ingredient for the collection of cakes and could not stock up on
time, the chef from Indonesia had to fly down to Singapore to
stock up on exclusive Valrhona Chocolates from France and fly
back the same day.

This eye for quality and consistency is seen as a necessary
trademark to his cakes that is well known for its rich taste and
is seen as the heart of his craft. In Indonesia, the hottest
selling item is in fact the Sop Buntut (Oxtail Soup) besides his
signature cakes.