Hong Kong hosted the Asian Licensing Conference last January 8-9, 2017 at the Hong Kong Convention and Exhibition Centre. Jollibee Foods Corporation, together with Media Spheres Communication Ltd. and ABR Holdings Ltd. were hailed as the VIP Buyers featured at the Hong Kong Licensing Show. With its leading brand being the Home of the Famous Chickenjoy, Jollibee supports such recognition opening up 4 branches last year and 7 more to go to complete its plan of opening 11 branches in Hong Kong alone as planned last April.
Currently, Ejinsight published during the same month last year that there are 1,145 outlets of Jollibee all over the world. It is astounding to see the growth of Jollibee Foods Inc. internationally. With it considered as one of the 3 VIP Buyers given an opportunity to showcase its brand, it’s inspiring to know how it all began.
As of August 2016, Jollibee Foods’ market cap reached a net worth of US$5.9 Billion dollars. Its industry comprised of franchising, leasing and food service of its carrier trademark Jollibee made all of this happen. Its CEO, Tony Tan Caktiong is hailed by Forbes as the 8th richest man in the Philippines with a net worth of US$3.4B. Take a peek on how he did it. And how maybe you can too.
Believe it or not, it all started with an ice cream parlour. For Filipinos, there’s greater impact knowing the vast company, Jollibee Foods Inc., started this way. In the Philippines, people could walk in the streets selling just about anything including ice cream.
Products vary from rice cakes, coconut (they open it in front of you for its fresh juice and meat), sugar cane, taho (soya bean) dessert, mattress, ice water…. literally, anything. Their capital? The voice to be heard at least from 2 blocks away; the feet – the more areas you cover, the greater the possibility to make a sale; and the creativity to think that they are experiencing a Saharan Dessert tour to endure the heat. Don’t forget, Philippines is a tropical country. There are only 2 seasons, wet and dry. During rainy season, they don’t get to sell. During the latter, it can be too hot.
Maybe that’s why Tony Tan thought of selling Magnolia ice creams first. At Cubao, Quezon City, the first Jollibee was accredited by the name, Magnolia Ice Cream Parlour in 1975. Tony and his family was serving ice cream but their customers were asking about availability of hot meals. They heard and felt the demand so they catered to it. They served hot meals side-by-side the ice cream they originally wanted to make big. Eventually, it became more popular that in 3 years, they had changed the ice cream parlours into fast food outlets. As per advice from a managing consultant by the name, Manuel C. Lumba, they gave up franchising Magnolia Ice Cream Parlours and built Jollibee Foods Corp. in 1978.
By that same year, 7 branches were up already. The first franchised Jollibee outlet was located at Sta. Cruz, Manila. From then on, they grew rapidly and was widely accepted for its original Filipino flavour that it withstand competition like McDonald’s and KFC.
THE SECRET WEAPONS
Undeniably, Tony Tan Caktiong and his family were the pillars of Jollibee Foods Corp. because if not for their hard work, it may have not reached 40 glorious years. But every restaurant should have a staple menu. And Jollibee nailed it with Chickenjoy. The crispy original Pinoy-flavored chicken had swept a lot of people off their feet.
Let’s take a look at how Anthony Bourdain tasted Jollibee way back 2013 when he had a taste of halo halo, the Aloha Burger and the Giant Little Bites, a slight change in the usual menu. Later on, he went to Manila in the name of his show: “No Reservations” to try and feature it again in the show in 2016 along with a lot more like adobo.
But the most convincing thing is to hear from non-biased first-timers for proof. Now, this couple drove all the way to try because of a Valentine’s commercial that showcased moments shared in Jollibee.
Not convinced? OK, You know what they say about kids that they don’t lie? Let’s hear it from my 3 year-old-daughter.
They said that greatest businesses is the one that gets kids involved because the market for it never dies. With good intentions, business ideas are meant to soar high when it is usually for the welfare of kids. And with Jollibee’s mascot of a huge bee in a shirt and a blazer with a chef’s hat, every kid gets crazy on how cute he is with a great smile and friendly eyes.
Caktiong, chair and founder of Jollibee Foods Inc., has the Filipino working folk in mind in considering this bee to represent Jollibee. Undeniably, Filipinos are everywhere. They are versatile with their skills and abilities that make it easy for them to adapt to basically any environment. In that sense, they may hop from one place to another but they produce sweet things in life like how the bee produces honey. Also, they are happy as they work hard. It’s just a Filipino’s nature to be hardworking, easy to get along with and stays happy even if life challenges had to be endeavoured.
WHAT WE’RE ACTUALLY LOOKING AT
Personally, I have grown to be a Jollibee kid. I’ve always dreamed of owning a franchise but since it’s worth a lot, I opted for buying shares of it. And as I continuously research and track its progress, it was not always smooth for Jollibee.
There were a lot of branches that had to be closed down at Oceania, Malaysia and in Indonesia because of the 1997 Asian Financial Crisis. 20 years after, it now has 1,145 outlets all over the world. 950 in the Philippines and the rest all over the world. With Hong Kong alone, it has 8 at Connaught, Central, North Point, Wan Chai, Tsuen Wan, Mong Kok, Hung Hom and Tsim Sha Tsui.
Its plans extend to Australia and Japan and more branches to be opened in China. While it is wildly embraced anywhere that has Filipinos, foreigners had grown fond of it. Dennis M. Flores, Vice President for International Markets and International Operations, that it’s not just domestic helpers in Hong Kong crave for Chickenjoy. In fact, during the work week, 3 out of 4 people that go to Jollibee Mong Kok are local Hong Kongers.
This makes Jollibee Foods Corp. or JFC pretty stable in the stock market. Its price per share increased significantly with a 36.45% gain if you had bought it last July, 2015. According to 2018 COL Financial (Philippines) Market Outlook, it secures its spot being a blue chip. It was considered one of the top stocks to have because of its strong portfolio of brands and good track record of earnings growth. It had become one of the most expensive consumer companies, trading at 34.8X ’18E P/E vs consumer sector average of 28.0x.
HONG KONG INTERNATIONAL LICENSING SHOW – MEET THE VIP BUYERS
To sum up everything, I would like to share how Hong Kong “alone” considers Jollibee Foods Corp. to be part of the VIP Buyers. With an aim to help start-ups, Jollibee Foods Corporation is seen as the largest fast food chain in the Philippines. It was introduced as an operation on a nationwide scale with a network of over 1000 stores. A dominant market reader in the Philippines, Jollibee enjoys the lion’s share of the local markets that is more than all the other multinational brands combined. To counter and to catch up with marketing trends that McDonald’s or Kentucky Fried Chicken strive to do, the company has also embarked on an aggressive international expansion. This includes the USA, Vietnam, Hong Kong, Saudi Arabia, Qatar and Brunei.
To further prove the strength it holds, it had bought the following food industries with the success of its flagship brand.
JFC acquired some of its competitors in the fast food business in the Philippines and abroad such as Chowking, Greenwich Pizza, Red Ribbon and Mang Inasal. As of January 2016, JFC had a total of more than 3,000 stores worldwide, with system-wide retail sales totaling 82.1 billion pesos for the 2011 fiscal year.
If you dreamt of owning Jollibee ever in your life, you can buy shares like what I did. Technically, it makes you a part owner. But if you have a great location with a great demand combined right in front of you, click on this link to franchise!
Whatever you choose, consider the risks. Balance it with the gains and you should be able to feel what is the right thing to do. For the mean time, moments like this are what you may contribute in doing because of owning a Jollibee. Seeing my daughter and her dad dancing at Jollibee makes the Jollibee kids in me happy in the simplest way.
But you can always start your own food company too.