Thursday, 29 March 2012

Marrybrown Fried Chicken ... a successful Malaysian fast food chain

Marrybrown chain prospering after many trials and tribulations
 
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Marrybrown chain prospering after many trials and tribulations
Today Marrybrown is flooded with requests from investors wanting to take up their fastfood franchise.

Malaysia, March 28, 2012

Thirty-one years ago, Lawrence Liew and Nancy Chan had dreams of investing in a fast food business but found it difficult to secure a loan for the purpose.

Bank officials were quite sarcastic as they flipped through the couple's business proposal and refused to approve a loan as they believed the plan was not feasible.

Even the suppliers the couple approached doubted the viability of their plan and were only willing to supply goods on a cash-on-delivery basis.

To make matters worse, owners of shoplots were reluctant to lease their premises to the pair.

Today, the couple are laughing all the way to the bank.

"Back then, we were treated like second-class citizens, they didn't even look at you," Marrybrown Sdn Bhd co-founder and managing director Chan told The Star.

Now, banks are knocking on their doors while mall operators and landlords are courting them to lease their units.

She said, in the past, the sceptics were brutal with their remarks.

"I can still remember their words until today, 'You can open a shop today and close tomorrow'," said Liew.

They have proven them wrong as Marrybrown is now flooded with requests from Malaysian and foreign investors wanting to take up the franchise.

Humble beginnings
Back in 1981, the couple took a gamble and started their business with capital of RM120,000 from their life savings and contributions from family members and close friends.

They opened Marrybrown's first restaurant serving burgers and fried chicken at a small rented shoplot along Jalan Wong Ah Fook in downtown Johor Baru.

Chan said when they started their fast-food business, Kentucky Fried Chicken, a US-based quick-service restaurant (QSR) chain offering fried chicken, was already a household name in Malaysia.

Chan said their venture into the QSR business at the time, was like David fighting Goliath.
With no business experience, they slogged day and night to build their business.

"The first five years were the toughest for us as we had to work hard to prove to our critics that we were going to make it," she said.

The company has grown over the years from a small rented shoplot to its own premises in Taman Pelangi.

Two months ago, the new RM6mil corporate headquarters in the Dewani industrial estate was opened.

Nurse turned entrepreneur
Chan, 56, left her job as a nurse and started the business at the age of 25 with her husband who is seven years her senior.

The former student of Sultan Ibrahim Girls School Johor Baru, completed her Malaysian Certificate Examinations and worked as a nurse for six years.

Hard work is not new to her as she had helped supplement her family's income from the age of 16 by giving English tuition after school and on weekends.

Chan remembered the money she earned from giving tuition was not much but it taught her to be more prudent in managing her finances.

The down-to-earth businesswoman said, although today she might have money to spend lavishly, she does not see the need to be extravagant.

Coming from a poor family, she missed out on a university education despite being one of the top students in school and opted for nursing instead. "Being a nurse helped me a lot in my business.

"As a nurse you have to have patience and be compassionate towards your patients and the same goes in running a business," she said.

A truly Malaysian brand, Marrybrown is now the largest home-grown QSR chain with over 300 restaurants in Malaysia, Azerbaijan, China, Bahrain, India, Indonesia, Iran, Kuwait, Maldives, Qatar, Saudi Arabia, Sri Lanka, Syria, Tanzania and the United Arab Emirates.

Twenty per cent of its restaurants in Malaysia are company-owned while 80% are franchised, while its overseas outlets are developed by its master franchisees.

The local and overseas restaurants are located at shopping malls, hypermarkets, theme parks, hospitals, universities, airports and neighbourhood estates.

When asked how she came up with the brand Marrybrown, Chan said the name popped into her mind when she decided to start the fast-food business.

"It is simple to pronounce, easy to remember and has an international appeal, as shown when we market the brand overseas," said Chan. She said it was important in the fast food business to adopt a name that was easy to pronounce.

Liew said most of the international fast food brands had three-syllable names such as Burger King, KFC and McDonalds, and so does Marrybrown.

The brand is so successful and the Government has decided to include it under the Malaysian Kitchen Programme to encourage Malaysians to open restaurants overseas.

Franchise model works
The couple realised that franchising was the way for them to expand their business locally and internationally, but back in 1986 it was something new in Malaysia and Singapore.

They looked at several franchising models from the US, UK and Japan and adopted the best to suit their business concept.

The company started its franchising system in 1986 for Malaysia and in 1992 in China, the first country outside Malaysia to adopt the Marrybrown business.

Marrybrown's franchising fee is priced at RM100,000 per outlet in Malaysia and the fee differs for international franchisees depending on the country's population size and market prospects for QSRs.

It was also the first international fast food restaurant to open in Tanzania and Maldives and the first Malaysian fast-food operator to open in Urumqi, in China's autonomous Xinjiang region.

Again, in the early days of franchising, they were turned down by locals when they proposed the system as many did not have confidence in the couple.

But this has not hampered them from working even harder. Today, the majority of its franchised outlets in the country are owned by the same franchise holders.

"Among the words uttered by them were how on earth can a local company like ours compete with the big boys from the US," recalled Chan.

Stand out from the rest
"We had to be different. Instead of fried chicken and burgers, we also offer local favourites such as nasi goreng, nasi lemak, rice porridge and satay," she said
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Chan said the Malaysian dishes are not only the main attractions among its local customers, but also popular at its overseas shops.

She said even her competitors in the QSR business from the US started copying the business model, to include rice dishes and other local foods on the menu list at their restaurants in Malaysia.

Chan said apart from promoting Malaysian dishes at its overseas stores, the company's franchised businesses also offer local dishes from the respective countries in which they operate.

Going forward, she said the Middle East is the most promising for the franchising business, aside from emerging economies in Asean, China and India.

Chan said being a local brand serving halal food is a bonus especially with the master franchisees in the Middle East.

She added that for years, customers in these Middle Eastern countries only knew of fast-food products and brands from Europe and the US.

"Feedback from our master franchisees there shows they are more comfortable dealing with Malaysian companies as we are trustworthy and reliable," said Chan.

She said the next market for Marrybrown is the African continent as many big boys in the fast-food business are not keen to go there.

Chan said having set foot in Tanzania, the company sees the long-term growth prospects in African countries as tremendous.

"To us, the African continent is like a diamond in the rough waiting to be cut and polished for the shine and sparkle to emerge," she said.

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