Ultra bilyonaryo Tony Tan Caktiong is the undisputed king of fast food in the Philippines. Many have tried, but no one has succeeded in knocking him off the throne thanks to his savvy business skills. He’s known to snap up potential competition (yes, we’re talking about Mang Inasal) before they can make a dent on his bottom line.
But Tan Caktiong’s success story isn’t entirely made up of profitable buyouts. Under his belt were a string of unprofitable acquisitions that have been largely forgotten because of Jollibee’s red hot success.
In its report to the Philippine Stock Exchange last week, Tan Caktiong’s Jollibee Foods Corporation (JFC) announced a P463.1-million impairment loss on the Pho24 trademark after closing all four branches of the Vietnamese noodle soup shop in the Philippines.
JFC’s losses are expected to balloon to P1.1 billion with the write-down of Pho24’s other assets like inventory and restaurants.
While Tan Caktiong has shown expertise in acquiring successful brands such as the Greenwich pizza chain, Chowking, Red Ribbon bakeshop, and Mang Inasal grilled chicken, he has struggled to replicate the magic of creating another original brand like Jollibee.
Tan Caktiong started to feed his appetite for domestic and overseas expansion in the mid-1990s after JFC reached over P1 billion in annual sales and raised lots of cash from an initial public offering valued at P9 per share.
He tried to introduce new fast food concepts to the Philippine market such as Manong Pepe’s Karinderia, Donut Magic Philippines, and Mary’s Foods (roast chicken). If none of these brands ring a bell, that’s because they didn’t click with consumers and were immediately shut down.
The Filipino-Chinese businessman’s record in bringing in foreign fast food brands to the local market has been equally spotty.
Tan Caktiong entered into a partnership with the Australian firm Royal Copenhagen Ice Cream for Ice Cream Copenhagen Philippines. It was envisioned to be a chain of ice cream parlors with freshly made waffle cones and ice cream made from authentic Danish recipes. The brand, however, failed to take off.
The 70-year-old tycoon’s foray into the bakery-café business was cut short after Delifrance failed to deliver the expected profits. The business was sold to Euro-Med Laboratories of the Yap family, which rebranded it into Cafe France. The sale also included assets of the Korean coffee and gelato brand Caffe Ti-Amo, another failed restaurant concept of JFC.
Tan Caktiong has also been unable to maximize the domestic potential of Burger King, which was conceptualized as JFC’s attempt to grab a share of the higher-end fast food market. The brand has undergone several relaunches since his conglomerate took over the Philippine franchise in 2011.
While Jollibee’s footprint in China and the United States continues to grow, the expansion of Tan Caktiong’s other food brands have been nipped in the bud.
Tomi’s Teriyaki, the Japanese-themed restaurant conceptualized for the American market, was shut down due to poor sales. JFC, however, kept the brand trademark and recipes. Tan Caktiong also cut ties with Chow Fun Holdings, the owner of Ninja Bar and Bistro chain in the US, after five years because their partnership failed to take off.
In China, JFC terminated its ownership of the Dunkin’ Donuts franchise—including seven branches of the donut and coffee shop— last year due to slumping sales. Tan Caktiong had big ambitions when he obtained the franchise in 2015, such as opening 1,400 outlets in 20 years. Unfortunately, he was unable to convince Beijing residents to swap their tea for coffee.
The jury is still out on whether Tan Caktiong’s two big-budget purchases, Smashburger and Coffee Bean & Tea Leaf, would succeed since both brands have yet to turn a profit since JFC’s takeover years ago.
Despite a bevy of failed acquisitions and losing half of his net worth after the COVID-19 pandemic bludgeoned Jollibee’s operations, Tan Caktiong still has his eyes set on turning the iconic fast food brand he created into one of the top five fast food chains in the world.
As Tan Caktiong says: “If you dream big and put your dreams into action, you will definitely make mistakes. But don’t be scared to make mistakes, just be quick to recognize them and learn from them as fast as you can.”
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