Jollibee – A Rising Star on the UK Franchising Scene?
Though here in the UK Jollibee may not be a household name, it’s quickly becoming one of the world’s most popular fast food restaurants. Here, we take a look at whether the business has adopted a franchise model and what has driven its success.
Jollibee is the world’s largest Asian fast food chain and boasts an impressive 1,200 restaurants worldwide. This includes markets as diverse as the US, Hong Kong, Saudi Arabia, and Canada. The business focuses on products that appeal to the Filipino palette, but that also incorporate elements of other cuisines. For instance, the company's most popular products include the Yumburger (a classic hamburger), the Chicken Joy (a fried chicken meal), and Jolly Spaghetti (a sweetened spaghetti dish).
Jollibee has always been open to franchising and continues to advertise to prospective franchisees. Approximately 1000 of the business' stores are operated as franchised businesses. While many of its flagship stores are managed in-house, the company believes franchising to be an effective means of expansion once a presence in a new market has been established.
Established in 1978, Jollibee has spent the last 40 years developing its business into one of the world's most promising fast food chains. Founded by Tony Tan Caktiong, the company opened seven outlets within its first year of business and quickly became one of the most popular fast food restaurants in the Manila area.
The business began franchising in 1979, and its first franchise unit opened in Santa Cruz, Manila. From here, the firm experienced remarkable growth, spreading both at home and in several important international markets. Perhaps its biggest test came in 1981 when McDonald's opened its first restaurant in the Philippines. Jollibee passed the test with flying colours by appealing to the distinct tastes of the Filipino population. It hasn’t looked back since.
The Jollibee brand
Jollibee has worked hard to export its reputation as the Philippines most loved fast food restaurant to other international markets. It focuses on generating a family friendly atmosphere and emphasises the unique nature of its products. In the past, when opening in new markets, it has benefitted from the remarkable devotion displayed by Filipino expat communities.
In the US, the opening of stores was greeted with scenes that resembled film premieres, with customers queueing around the block to get in and driving hours to get a taste of their beloved Jollibee. The current Jollibee mascot is a bee equipped with a chef’s hat – the image features in the vast majority of the company’s branding.
In the past, Jollibee has always opened in markets with a significant Filipino population. However, the brand has now grown beyond a loyal Filipino following and is being embraced by local communities who enjoy a change from the fast food norm. In 2019, Vietnam will become the market with the most Jollibee stores (after the Philippines), while the US has become a key stepping stone in the franchise's international development. This makes the company's move into the UK market an exciting proposition.
Having recently opened its first European store in Milan, Jollibee recently announced that the site of their first UK branch has been confirmed. The location has been identified as a premise on Earl's Court Road, London and the store should be opened by the end of 2018.
Jollibee management has identified the UK as a key market for its future development and sees the country’s cities as ripe for widespread expansion. However, it has said that its Jollibee UK business will focus on a slow rollout that prioritises strategic locations, rather than developing a large number of stores over a relatively short period.
Initially, the franchise will target the Filipino expatriate community, though it hopes to generate enough interest to attract a significant number of customers who have never experienced Jollibee’s products.
Fast food chains UK
In the Philippines, Jollibee outsells all other fast food chains, and though this would be an overly ambitious goal for the franchise in the UK, it still hopes to make a significant mark on the industry. While McDonald’s is by far and away the most popular fast food outlet in the UK, there’s also stiff competition from KFC, Subway, and Burger King.
While these businesses sell a similar product to Jollibee's, the franchise boasts a number of distinct advantages over the competition. First and foremost, there are no Asian QSRs in the UK's top ten most popular fast food restaurants. Secondly, Jollibee has already established itself as an enormous brand in its home market and will be able to leverage this to create a buzz around its UK launch.
Jollibee’s future expansion
Those in charge of the business demonstrate no lack of ambition. The Jollibee founder, Mr Tan Caktiong, has gone on record as saying he intends for the company to become one of the world's top five QSRs within the next five years. This will involve opening 300 stores in the Philippines every year and expanding rapidly in the incredibly profitable US and Chinese markets.
While the London branch of Jollibee marks the franchise’s first foray into the UK market, there’s sure to be more stores popping up in cities across the country over the coming years.
Expansion via acquisition
Much of the business’ expansion will occur via acquisitions, with the company already having earmarked at least $1 billion to be used on acquiring competitive businesses. This is a policy that has been widely used in the past. Jollibee Holdings, the franchise’s parent company, has acquired an 85% share of the US-based Smashburger business and also owns the Philippines-based Chowking, Greenwich Pizza, and Red Ribbon Bakeshop brands.
The company also owns the rights to operate the Dunkin' Donuts brand in China, giving it a remarkably lucrative foothold in one of the world's largest consumer markets. With such purchasing power and a large number of established brands already under its belt, it's difficult to see Jollibee not going on to become one of the world's leading fast food franchises.
The Editorial Team, Point Franchise ©
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