Friday, December 22, 2006



"Fortune favors the brave!" Whoever coined that Latin saying centuries ago must have been thinking about Jollibee.

Anyone who knows the QSR business will tell you that one of the keys to success is aggressive store expansion. Opening as many stores as you can not only makes your food accessible to many more customers, it also gets the brand known.

Well and good,that is, if you're confident enough that the business climate is so favorable that every store you open will make a profit.

But what if the business conditions are not so good?

That was the state of things when I first started in the fastfood industry in 1983.

Ninoy Aquino had just been assassinated on August 21. There were rallies everywhere and there were fears that Marcos would have a good excuse to impose martial law once again (although we were still under what was called his "benevolent dictatorship.")

In the face of all this chaos and uncertainty, many businesses took a wait and see attitude. That's what happened to us at KFC.

When I joined KFC, it already had 11 stores. I helped open one store in Dau,Pampanga sometime in December,1983. Then when I left KFC in 1985,we had opened only 2 more outlets (Greenbelt and Katipunan) for a total of 14.

Contrast this with Jollibee.

When I joined the company in 1985, it already had 20 stores. Jollibee was going through the same uncertain business climate as KFC and yet it was expanding aggressively.In fact,it was scheduled to open 4 stores during the second half of 1985. I know because one of my first assignments was to train the managers who would man these new stores.

All other players in the industry seemed to be taking a more cautious and conservative stance.

Jollibee's gamble paid off handsomely. When Marcos was finally overthrown in February,1986 and the business climate turned for the better, guess which brand had the most number of stores!

By the end of 1986, Jollibee was 27 store strong and to top it all,these stores were making good sales. We also ended the year Number one in sales among the QSRs. KFC,which was still beset with labor-management problems had dropped to about number 4 behind McDonald's and Shakey's.

Time and again,during my more than 14 years stint at Jollibee,I was going to witness and be part of this phenomenon of "thriving in chaos" which was to be characteristic of the company.As I will write in future blogs,Jollibee always had a way of turning problems into opportunities for progress.

And I sure am glad I was part of it all!


One of the reasons why Jollibee managed to leave everyone else in its wake is that the owners were never scared of competition. The Jollibee logo might portray a happy,smiling and amiable bee...but what most people didn't know was...this bee knew how to sting.

I heard this story from one of the Tan brothers, Ernesto "S' Ato" Tanmantiong. When news about McDonald's coming into the Philippines started spreading, (I believe this was in 1978,when Jollibee was just 3 years old), their friends advised them not to compete with this international giant.

"Close down," they were told. Or look for another business (perhaps franchise an international brand.) The unsolicited advice was not without any factual basis because McDonald's had built a reputation of always taking over the number one position in every country they had opened.

But the Tans were not fazed. Instead of exiting gracefully,they decided to give McDonald's a fight like they never experienced before.

Since this was supposedly a heavyweight that they were facing,the Tans made sure that Jollibee was fighting in the same weight class as its adversary. They went to the USA to study the competition and learn what they needed to change in Jollibee's operations.

I was told that the brothers would go into a McD's and study the operations as customers. They would pose in front of the counter as if to have their picture taken,but actually they were taking shots of the menu board and whatever could be seen of the kitchen.

When they came back from their "study tour" they started renovating their existing stores and opening new ones according to a store model that was close to the international look they saw in the USA. If I remember right, the store in the old Virra Mall was the first one to sport that new ambience, although it was still basically a semi-waiter service type of operation.

The shift to the new look must have caught McDonald's by surprise.

S' Ato narrates that during one of the grand openings of the "new model" Jollibee stores, he once saw George Yang, the McDonald's franchisee,"paying a visit." He recalls seeing a look of surprise and concern on Mr. Yang's face that time. Perhaps George Yang may have been surprised at how well Jollibee had renewed itself, and realized then that the bee he was supposedly going to squash was, after all, no pushover.

And history has proven that Mr. Yang's gut feel was right!

Tuesday, December 19, 2006


I got my first taste of the fastfood business sometime in April of 1983 when I joined Foodmine Inc.,the local franchisee of Kentucky Fried Chicken owned by the Quesada family. I joined the company as an HR (Training) Specialist and eventually was made its HR Officer when my boss, Joseph Hernandez,resigned in 1985.

The QSR industry, which was better known then as the "fastfood business," was just starting to grow and was regarded as the sunrise industry.

If I remember correctly,Shakey's Pizza was the industry leader. KFC,which had 14 outlets by 1984,was sometimes at second place and sometimes at third.

McDonald's,which opened its doors in the Philippines sometime in 1978 was a fast rising star and was KFC's closest rival for second place.

But the "dark horse" that finally beat all the internationally known brands turned out to be a homegrown burger chain called, Jollibee.

While I was at KFC, we didn't pay too much attention to Jollibee as a threat. The brand we were worried about was McDonald's. In fact,we benchmarked ourselves against McDonald's which we regarded as the standard of a well-managed operation. We went to the extent of getting ourselves a store tour inside their New Frontier outlet by posing as College professors who were supposedly curious about learning McD's inner workings.

I have to admit that I was impressed with what I saw during that tour!Everything was done according to the QSC standards we were trying to impose at KFC!

Our problem at KFC then was how to get the store crew to follow standard procedures as outlined in the KFC Operations Manual. Compliance to these standards was a "must" if the owners wanted to retain their franchise. Unfortunately,since the crews of KFC were mostly "old" personnel from the Quesada family's Bonanza restaurant,it was an uphill battle trying to convince them to do things by the book.

Complicating this scenario was the fact that KFC was unionized. You had to get the union leaders' cooperation first before you could implement any "standard practice." Of course, any initiative we took to improve store operations was looked at with suspicion because we, at Training, were part of management.

This struggle between management and union came to a head when in 1984,the union went on a wildcat strike that lasted for about 3 weeks. When management sued for peace and the strike ended though,things were never the same again. The union members who felt they had won a moral victory were now more emboldened to make things difficult for management. If they didn't like something that management imposed they would threaten to go on strike,and management would back down. What's worse was that top management took it against the store managers for not being able to impose discipline on their crews.

A case in point was the implementation of forced ranking in the performance appraisals of the crew. The union saw this as an unfair way of assessing them and so directed its members not to sign their performance appraisals. Top management issued a directive to all managers to make sure the P.A.'s were duly signed or else face the possibility of disciplinary action.

Because of this,the store managers in the KFC branches eventually became demoralized. There was a mass exodus of managers such that at one point almost 90% of them had resigned. Since I was head of the Training department at the time I had a difficult time filling up our stores with half-baked management trainees who only had 2 weeks of crash training.

Many of those who left, applied for store manager jobs at Jollibee. During the first quarter of 1985, KFC Area Manager Jimmy Enriquez, Store Manager Raffy Selga,Assistant Managers MeAnn San Juan, Livia Pingol and Bambi Bejo were accepted into the Jollibee family.

Those of us who were left behind at KFC started hearing stories from our former colleagues about how well-managed Jollibee was and how better off they were compensation and benefits-wise.

It wasn't long before I myself started looking at the option of joining Jollibee.

I learned that Jollibee was planning on opening a Jollibee Training Institute which would be its equivalent of McD's Hamburger University. To spearhead the project they had hired a professor from the University of Maryland, a Dr. Ambrosio "Butch" dela Cruz and started looking for trainers from the fastfood industry to help him set it up. Although I had just been recently been promoted to my HR Officer position at KFC, I decided to send in my resume.

After about 3 months of waiting, I finally joined Jollibee on June 26, 1985 as a Training Specialist of Jollibee's Training Institute.

It was to be the start of an exciting, fulfilling and very rewarding career in a company that was soon to become one of Asia's most admired companies.