5 Steps in Building the Best Food Franchise – Lessons from Mang Inasal

Only a few of us will become overnight millionares as the person that won the P741 million Grand lotto jackpot last December, last year. While many of us long to have the same good fortune, some of us get rich the old-fashioned way: by dint of hard work and doing good business.

In that class belongs Edgar Sia II, who became a billionaire when Jollibee Foods Corp. bought 70% of his upstart food company, Mang Inasal, in November 2010 for P3 Billion.

Here are his 5 steps to success:

Step 1: Mop the Floor

Much is said of being hands-on with your business, but with Mr. Sia, who started Mang Inasal at 26 years old, he couldn’t be hands on enough.

“It has been said many times that Mr. Sia would mop the floors of his first few restaurants. This speaks volumes of his humility and character,” says Lex Ledesma, a native of Iloilo province who is the executive director of The One School and a serial entrepreneur himself.

Incredibly, Sia was doing these menial jobs at Mang Inasal while running four other businesses in Iloilo. As his business was expanding, Mr. Sia insisted on personally knowing a place where a Mang Inasal branch would be put up. As a result, “Mr. Sia has thorough graps of locations in the country,” says Armando “Butz” Bartolome of GMB Franchise Developers, who Sia approached to help build Mang Inasal’s franchising operations. “He traveled to every town using various means of transportation and staying in any type of hotel. It was his way of understanding the culture and habits of each town.

Step 2: Make a Gamble

Sia is renowned by his peers as a business-minded risk taker. For instance, Mr Sia bought and sold cars from classmates and friends soon after graduating from Iloilo Central Commercial High School, the country’s second oldest Filipino Chinese school, according to car salesman Jun Banares, whose brother went to the same school.

Mr. Sia made a gamble when he went out and took the effort of locating his first Mang Inasal outlet at a parking building instead of inside a mall. And then expanding the space he rented from just 100 sq m to thrice its size.

Step 3: Think of the Customers

Despite the fame that business success could bring. Sia was never one to hog the spotlight. Innately shy, Mr. Sia would come to Mang Inasal stores anonymously, and when the staff did recognize him, he’d tell the staff not to accommodate him.

Another time when the 320 sq m restaurant was overflowing with customers beyond its 300 seat capacity, Mr. Sia requested Robinson’s management to let them place more tables and chairs around the store’s perimeter so around 80 more people could be seated – and the mall bosses agreed at no additional rental cost to Mang Inasal.

Step 4: Spread the Wealth

Mr. Sia is a hero in Iloilo not only for putting up a national brand from the provinces but also for giving opportunities to small-scale suppliers around Mang Inasal outlets across the country.

“During the time he was putting up Mang Insal, he found an old lady in the public market at a corner selling some baskets of kalamansi. He then asked her to supply his first few branches. The woman found herself earning more than she could ever dream of in her lifetime.”

For all the wealth he’s amassed, Mr. Sia has given back to the community, both silently and through his Injap Foundation Inc., which recently pledged P25 million as seed money for a new public college in Iloilo City.

Step 5: Be Unique, then Franchise

Although offering chicken inasal is not an original concept, Sia built Mang Inasal’s brand on three things: new idea, an irresistible offer and franchising.

“In my opinion, Mang Inasal is a Bule Ocean (concept), being the first and only fast-food inasal chicken vendor in the market,” says Ledesma. “Jollibee tried to compete by offering a similar product before finally realizing that it made more sense to just acquire its competitor.”

“Jollibee buying Mang Inasal is a proof that if an entrepreneur aspires to go big-time, “its not enough that you have a good product. You have to create a niche and have a clear unique selling proposition”.

“Mr. Sia didn’t even create a new product, but instead presented an old product in a whole new way. It also helped that had the marketing know-how to create the unlimited rice trend.”

“That’s why for entrepreneurs, the first challenge should be to grow the business so that your business will get noticed. One should be able to achieve brand position,” says Bartolome.

“This even, he adds, proves that in time and through franchising, any small business can grow and entrepreneurs can be rewarded when big and mature companies take notice and offer you a price you cannot refuse.” These opportunities can come, as a result of years of commitment and focus on the business you have.

Mang Inasal Sale By the Numbers

P3 Billion
– Jollibee’s investment in Mang Inasal

7 Percent
– The amount the Mang Inasal purchase would add to Jollibee’s net operating income

P2.6 Billion
– The total operating income reported by Jollibee for the first nine months of 2010

P3.5 Billion
– Jollibee’s estimated total operating income for the year 2010

P245 million
– The estimated contribution of Mang Insal to Jollibee’s earnings for 2010, representing Jollibee’s 70 percent share in Mang Inasal.

by Jimbo Gulle