Nacho King Finds Crispy Success (Philippine Daily Inquirer)
Establishing Nachos as a Staple Snack Food (Negosyo)
The Young, Hardworking, NACHO KINGS! (The Philippine Star)
Franchising may not immediately turn your firm into a Jollibee, but it could be the first step (Philippine Daily Inquirer)
Who’s Minding the Store? Two young entrepreneurs just do it! (The Sunday Chronicles)
Nacho King Finds Crispy Success
By Robert J. A. Basilio, Jr.
When he came back from the US in June 1994, Nacho King owner Mike Singh brought home two things, among others – a college degree and a fondness for nachos.
After getting a job at a bank, Mr. Singh met up with Teddy Manotoc, an old friend way back during their days at the International School Manila, who worked at a brokerage firm. During this fateful reunion, both of them learned that they shared a similar dream. They both wished to establish a business since they wanted to supplement their corporate incomes.
After surveying the market for an easy start-up business, they were able to narrow down their search for food.
Because of the apparent success of Potato Corner, a stall which sold regular and flavored French fries, they further limited their search to the food cart industry. And then the idea of what kind of food to sell came naturally.
“Since my favorite snack in the US were nachos, I brought the idea up with Teddy and we both immediately loved it,” Mr. Singh said.
Finally, after months of research and hard work, the two entrepreneurs were able to get the chance to present their idea to the SM Group. Convinced of Nacho King’s potential, SM Group executives gave them the opportunity they were waiting for. And the rest, as they say, is history.
In April 1995, Nacho King! Opened its first outlet in SM City North Edsa. Because of its immediate success, the SM Group eventually gave them spaces in all its malls. Currently, there are 20 company-owned outlets and 42 franchises, with anywhere from two to five franchises being sold every month.
Because Nacho King! Has maintained the quality as well as the uniqueness of its product ever since it was given the chance to operate in SM City, the company still has no serious direct competitor. In fact, Nacho King! Is the country’s biggest wholesaler of nacho and other nacho products.
“This is because our products are difficult to replicate and that we manufacture most of our products on our own from scratch, including the tortilla chips,” Mr. Singh said.
As with almost all other franchises, the location of a Nacho King! Franchise counts a lot. But being in a low-people traffic area, said Mr. Singh, doesn’t mean that one’s franchise is automatically a losing proposition.
“If you’ve got a great concept, a great product, and a well-run operation, it makes no difference if the people that pass by your establishment are infrequent,” he said.
Mr. Singh also assured that once anyone becomes a member of the franchise family, Nacho King! has a dedicated department to guide franchisees to ensure that they have a profitable operation.
Their expansion plans meanwhile are simple yet ambitious enough. Not only do they want to saturate the local market including the provinces, they also want to venture outside of the country and become a global brand.
“If foreign franchises can leave their countries and expand elsewhere, why can’t we Filipinos do the same?” said Mr. Singh, adding that plans are already under way for establishing Nacho King’s! international branch as well as venturing into the fast food restaurant business, although these are still kept under wraps.
Establishing Nachos as a Staple Snack Food (Negosyo)
By Melissa Casia
Nacho King’s staying power is no secret before anything else, one has to have a quality product. Whether it’s new or old, you have to have quality. That’s one of the advantages we have at Nacho King.
It was 1994 when best buddies Michael Singh and Teddy Manotoc decided to start what is now a chain of food carts and kiosks they christened Nacho King. At that time, several franchisees from the United States were coming in but they didn’t have that much capital to invest in one. Teddy recalls, “We looked at the market and what was there. Instead of buying a franchise, let’s get a product that works in the States and it here and make it Filipino in taste. So he thought of nachos. And I thought it was perfect. We said na pwede siyang maging staple snack food.” At the same time, Teddy saw the ascendancy of food carts and believed in its potential that the partners decided to make use of it.
Teddy further recalls there wasn’t any research and development department to speak of back then. He himself concocted the recipes. “Actually, iyong toppings, iyong chips, kami ang gumagawa. Iyong recipe, like iyong salsa, pinatikim ko sa pamilya ko. Kulang ng calamansi, ok lagyan ng calamansi. Ganon lang iyon.”
Nacho King opened its first outlet o April, 1995 in SM City to resounding success. “From day one, Filipinos loved our product.” Teddy and Michael were proven right. Filipinos took to nachos and it easily became a favorite snack food. Shortly after, Nacho King awarded its first mall franchise in 1996 and there was no turning back. To date, Nacho King boasts of 90 outlets nationwide.
Franchising is a business strategy that helped Nacho King expand that aggressively. Teddy says there are generally two types of people who approach Nacho King. “One wants it just as a sideline. There’s the one who’s really serious about it. They want to invest in one franchise and say if I can make this work, I’ll put up more branches. We’re ok with both. But we prefer the person who’s serious and wants to have more than one branch.”
Teddy cautions, though, about the impression that a franchise runs itself just like that. “In our case, you’re investing in a product that already works. So tanggal na iyong question na, will it work? Tama ba iyong formulation ko? Number two, you’re investing in iyong sistema ng franchisor. So wala ka ng question mark na, ano ba ang gagawin ko? Tinuturuan ka na kung paano. Kulang na lang is, iyong time mo. And iyong location. Kahit anong produkto, kung walang taong dumadaan, walang bibili.”
Another prevailing misimpression amongst the uninitiated is that an entrepreneur can just go to work whenever he feels like it. On the contrary, Teddy clarifies, “you don’t really own your time especially at the start of your business. Your time is dedicated by what your business demands from you. So, if you have to get cheese kasi out of stock kayo, you have to get it. Otherwise, wala kang benta, wala kang kikitain. Sa amin, bawal nga iyong ma-out of stock.” The second is that business involves some form of risk. One only has a better chance of making money by buying into a proven system of operations.
But, obviously, there is a lot to be said about owning one’s business. Foremost of which, is, in Teddy’s words, “ fantastic return on your money”. Eventually, too, the business should afford you more flexible time. “you don’t have to be there kung na-set up mo na.”. Teddy further elaborates, “of course, there’s the satisfaction that it is your business. And you get the opportunity to benefit from being a business owner-employing people, providing a good product to our customers. To just see that connection of a person who likes your product can be very fulfilling.”
The country’s uncertain economic climate gives rise to the observation that food is one product people will patronize. But the competition gets tougher every year. Teddy observes, “Go to the mall and ang daming mapapagpilian. So ang maganda sa amin is, you’re talking about a brand that’s more than 10 years. So it’s not a fad. And it’s still growing. We’ve been franchising since early ’96 so nandyan na iyong sistema. And then we’re committed to the business.”
Nacho King offers Overseas Filipino Workers an additional business opportunity. The company exports its corn tortilla chips mostly to Asia and the Middle East. Teddy expounds, “An OFW doesn’t need to get a Nacho King franchise. You can just buy the products from us. If he buys in bulk, he gets a very good price and you can sell it there.”
Nacho King’s staying power is no secret before anything else, one has to have a quality product. “Whether it’s new or old, you have to have the quality. That’s one of the advantages we have at Nacho King. We make our own products. We make sure that we have that product standard. Second is, yes, you often have to innovate, but you still have a base product which, if it clicks, and has stood the test of time, nandiyan pa rin yan. So in our case, we have nachos that we have been serving for 10 years but we’ve expanded which give the customer a variety of taste. Yes, innovation is important. But quality comes first.
The Young, Hardworking, NACHO KINGS! (The Philippine Star)
By Tony Leviste
‘Their advice to young entrepreneurs: Don’t be afraid to fail: you’ve only really failed if you never tried at all.’
How would you like to be 24 years old, single and own and operate your own growing company, employ over 50 people, have a secretary or two waiting on you, and be called – KING!? Teddy Manotoc and Mike Singh, 24, are the faces behind the popular Nacho King Food carts we see in all major shopping malls these days. From their first Nacho King Food stand in 1995, the company today has grown and multiplied to a total of 20 food carts. But success did not come all too easy for Mike and Teddy, who say that they have been the best of friends ever since high school. Although they did not have similar backgrounds – Teddy studied in Bath, England during his grade school years, While Mike lived in Chicago, USA – the two crossed paths in ninth grade of the International School (IS), Manila. After graduating from IS in 1990, Mike and Teddy went their separate ways once again. Mike pursued a pre-law degree at De Paul University in Chicago, while Teddy studied Communication Arts at the center and Research and Communication (CRC). Despite their distance, the two never lost touch and continuously updating each other on bright, new business ideas. Both had dreams of becoming entrepreneurs and being their own bosses. Mike came home from America and was hired as an assistant manager of the Bank of the Philippines Islands (BPI), something he thought he wanted to do. “I’ve always dreamed of being a top corporate executive with that office on the 15th floor”, Mike says. Teddy, on the other hand, pursued a career as a stockbroker at the Makati Stock Exchange. Teddy says that unlike Mike, he never wanted to be in the banking industry or the corporate world. “I’ve always had a business inclination ever since I was a kid. I remember selling stamps, posters, chocolate bars, and even cutting hair when I was in grade school: I was happiest working for myself.” Basically, he just did not enjoy working in the stock brokerage and wanted to have his own time. The idea of food carts was envisioned by Teddy in 1994, who saw the rise of their popularity, as seen through the likes of Potato Corner, now totaling over 100 carts around the country (which sell flavored French fries). But the more important question was: What were they going to sell? Mike clearly recalls that it was while he was in the shower that the idea of nachos popped up. And what better name to call their nacho cart than Nacho King! Teddy and Mike describe their very first “company” meeting is total comedy. They knew they wanted to go into the food cart business, they also knew that they were going to sell nachos, but what they did not know was how to go about it. So, the first thing they picked up was the eve-reliable, ever dependable yellow pages! They did not find anything on manufactures of nacho chips or any other useful information to help them start their little business: but that first meeting affirmed one thing; they were on their way to finally fulfilling their long awaited dream. The first step for Teddy and Mike was to find a tortilla chip manufacturer. They searched the aisles of grocery stores and look at the back of tortilla chip packages. It was when Mike was on his way to Baguio that he stopped by a gasoline station and entered a one-stop-shop and-lo and behold – stumbled on a tortilla package with its manufacturer’s address pasted at the back. To create the perfect tasting cheese dip to go with it, Teddy and Mike hired a technician from the University of The Philippines. The food technician helped them formulate and experiment on various cheese recipes. The taste tests took weeks, until finally, with other traditional favorites, such as salsa, jalapeños, spicy minced meat, and chili, to add to their selection of toppings.
Teddy and Mike got their first lucky break when the SM Megamall executives (known as leasing officers) return their incessant phone calls and scheduled a meeting presentation with them. Naturally, they were very nervous, they were merely 22 years old, at that time, and were about to make the presentation of their lives (one that could make or break them) to executives 20 to 30 years their senior. Teddy recalls that he had just bought a second hand cheese pump to use for the presentation. Although the cheese was a bit cold and the nachos not quite crispy, the overall presentation was a success. It took one year, many hours of labor and countless Saturday night meetings from the evening of their very first meeting, where the idea was conceptualized, to their first and only presentation at the SM City office. The leasing officers liked what they saw and what they tasted Mike and Teddy were awarded their first space at SM North Edsa, and one week later, they were awarded their second space, which turned out to be at the third floor, cinema level of the SM Megamall. Initially, Mike and Teddy had to cook, serve, mop the floors, and even drive the delivery van. Today, they employ over 50 people, with five managerial staff. The product clicked almost instantly. After only two years of operation, Nacho King Carts can be found in all major Metro Manila malls, and have even branched out to Cebu and Bacolod. When they actually established their company under the name, Emyth, Inc., nobody believed that it would succeed. The advise their parents gave them was to first gain enough experience working for an established company before setting up their own a sound advise most parents would give their children. “But when do you say you’ve had enough experience – when you’re 40 years old and married?” asked Teddy, whose advise to aspiring young entrepreneurs is, “Don’t be afraid to fail; you’ve only really failed if you never tried at all. If you tried but failed, surely you would have learned a whole lot from the experience, and you can always go back to work.” (Ted, are you sure I didn’t hear this line in Forrest Gump?) Mike says that the secret behind the partnership’s success is that everything is shared 50-50: profit, credit and work. They still work as hard as the first day of Nacho King’s operation. Today, they not only offer franchising but catering services, as well. They hope that Emyth, Inc. can one day become a holding company, and perhaps venture into the global market.
Franchising may not immediately turn your firm into a Jollibee, but it could be the first step (Philippine Daily Inquirer)
By TINA ERCEO-DUMLAO
BUSINESS consultants have constantly harped on the idea that a crisis situation is the best time to expand one’s business. As the old Chinese saying goes, there is opportunity in crisis. But the currency crisis that struck the Philippines and other Southeast Asian countries left business firms with the problem of rising enough capital, and raising it fast, and embarking on an expansion while preventing others from stealing their ideas. The answer according to Francorp International, lies in franchising. Franchising, it says, allows these entrepreneurs to expand a great business quickly with minimum capital. Francorp president Vegard Vevstad says in a recent seminar attended by interested franchisors those franchising offers a cheaper and easier alternative for expansion since the capital will be raised by the franchisees who will also take over the daily operations of the business. Franchising generally works like this: The franchisee pays an initial franchisee fee, he furnishes all the capital required for opening the unit and assumes full financial and operational responsibility for running the business. He even pays a continuing royalty and will often buy products from the franchisor. In return, the franchisor allows the franchisee to use his trademark, trains the franchisee to run the business, assists during the start-up period and provides continuous support in the form of advertising, purchasing and operational assistance. For the franchisor, the cash flow from franchise fees and royalty provide cash for the development of additional company-owned units, expansion can be accomplished more rapidly, collective buying of goods results in savings and greater income can provide for additional research and development. On the other hand, the franchisee is attracted to the business since it removes the risk of starting his own business, allows him to be his own boss, and take advantage of the tested concept, trademark, identity and operation of the franchisor.
Who should go into it?
Franchising, however, is not an option available to all businesses. Francorp says one of the key factors that determine if a concept can be franchised is the business’ ability to be easily replicated by other entrepreneurs. The business should have also reached a certain level where there is already a determined market and a following which would attract other businessman to buy their concept of the name. The systems and operations should be refined enough to allow someone else to replicate the franchisor’s success. Franchising, after all, is already about taking a product of service that is already in demand and simply duplicating it. Francorp says franchising can apply from the smallest to the largest businesses. About the only business not suited to franchising are those that are highly technical and require extensive traning to manage.
What a firm needs
Before a company can begin offering franchises, it must have a document that describes the business, often called a “franchise offering circular.” It should provide a profile on the franchise owner, type of franchise offered, determination of location, franchise support programs. It should also contain the company’s history and its financial condition. Potential franchisor can also approach consultants or expert in the business who can help draft a franchise agreement-a contract between franchisor and fraanchisee-and help determine what franchise fees and royalties should be charged. Vevstad encourages local firms to look closely at franching as a viable option to expand the business and give them the advantages of speed, capital and motivated management that they would not be able to access as easily on their own. Francorp says franchising, by itself, will not turn a company into the next Jollibee or McDonalds but it could be the first step.
PHILIPPINES COMPETITIVE FRANCHISOR INFORMATION RETAIL FOOD: KIOSKS, CART
|Category||Potato corner||Giacomino’s||Dimsun n’ Dumplings||Nacho King||Burger Machine|
|Term/Renewal||3yrs.||3yrs.||1, 2, 3 yrs.||5-10yrs.|
Nacho King is a chain of food carts and kiosk that has taken snack lovers by storm. It was a place to get really good nachos fast and at affordable prices. An instant success, it has quickly grown to become a Filipino household name with outlets in several parts of the country.
Who’s Minding the Store? Two young entrepreneurs just do it! (The Sunday Chronicle)
By GINA AREOPAGITA
Youth is often wasted on the young, the conventional skepticism goes. Generation X is dismissed as a confused, self-destructive bunch. Given to indulging in a heady but deadly mix of a casual sex, drugs and alcohol. All that vigor, enthusiasm and idealism is misdirected; the future as hopeless as their young lives. But there are dreamers still. A few who know how to navigate through the swirling waters of their age, who strive to rise above the cesspool of mediocrity, who know how to create their own unique paths, who actively seek to carve a niche with the indelible imprint of their own personalities. Two young people; ages 22 and 24, who now manage their own businesses, have risen above the unsavory reputation of Generation X. They have introduced their own products with the touch of dedication and discipline. The owners of personalize it and the Nacho King’s (food cart) share their story of how things came about: Different approaches and attitudes leading to the same goal-a successful business enterprise.
The Nacho Kings
Somewhere in the outskirts of Mandaluyong, two units of town-houses is the office of the Nacho Kings. Tons of Nacho chips tucked inside big plastic bags are scattered all over the place. A huge man with Indian futures appears for the interview. Mike Singh, part-owner, strikes one as young man possessing a high powered perception of himself, exuding the confidence of someone who has achieved something beyond any man’s dreams. “I came back for school in 1994, De Paul University in Chicago. Teddy Manotoc was my partner at CRC (now the University Of Asia and the Pacific). We were classmates at the International School. We were close friends; we kept in contact even while I was in the United States. When I came back I ran into him at the Polo Club. So we did some brainstorming. Our capital was only P200.000. At the time Potato Corner was a hit so we thought of the push cart industry,” he relates. The idea came up to him while he was in the shower. He brought the idea of replicating Taco Bell as he had seen it in a Cafeteria in US to teddy. A year ago Nacho King was launched.
Sounds easy but not so.
“It was a series of meetings. First, we decided where we going to get the food – the biggest item in Nachos are the chips and the cheese. We looked through the phone book and went around the supermarkets scouting for the best. My parents also referred to us the best; you see my parents are in the food business – the Cashmere Restaurant. We experimented on other combinations like beef, salsa, sour cream, chili; approximately every quarter we’re introducing new toppings,” he continues. From 1995 the Nacho King have become bigger and is now found all over the city, with 23 branches, and outlets in two provinces. Franchise range from P250.000 for the prime locations and P150.000 for bracket B. “In the beginning we expanded heavily. The reason was to prevent people from copying our products, to block the competitors. Now we sort of slowed down because to operate a business in expensive. Wages are going up, rents are up and even the prices of the suppliers are up. By the end of the year we’re thinking of making everything on our own so we can control the pricing. However, that involves investing in machineries. As for franchising we get 10 inquiries everyday; we’re about to close two next week.” Business means serious business to those young men. “In the beginning we did everything ourselves. My car was the delivery truck. I had to drive around to all the outlets. There was a time when our supplier wasn’t able to deliver the cheese so teddy and I spend two days in the kitchen. Because we didn’t wanna close down we really wanted to prove to the malls that we can deliver.” They make a marketing proposal to the mall (SM North Edsa) and sat around for six months. They would call every day in that period just to make sure that they were heard by the management because a mall usually receives about 2,000 proposals each month and getting in was definitely difficult. Finally in April 1995 they opened their first branch.
Two Young Entrepreneurs Just Do It
With 23 outlets, one can imagine the huge profits generated from this business each year. But “food cart industry’s profit is about 15%.Our take-home is smaller because we use real corn for the chips and cheddar for the cheese, and we can’t increase our prices,”Singh says. Besides they’re also spending heavenly on advertising, “Our marketing gimmick is using PBA players, we hired Samboy Lim and now Andrew Siegal of Mobiline. It costs a lot of money; there’s no real way to quantify whether the money spent is directly increasing your sales. However, the factors that entice the company to spend on advertising are the fact that the competition is so fierce and customers have so much to choose from. And objective as a company is to familiarize people with our product so that every time they think of snack, they’ll think of Nacho. Our two goals are having a good product which is in our control and familiarity from people,” he says.
Snack food as a fad did not escape their strategy, “There’s always the risk of it being a fad, so we’re always worried whether to spend more money because tomorrow people maybe sick of it. That was a risk we faced in Year I. Nearing Year II however, our sales have not decreased so we believe it’s not a fad I think we’ve overcome this faddish thing. As long as we introduce toppings, we advertise-you have to make consumers aware that we’re still around-we maintain our quality, I believe we can fight out the fad.”
After Nacho Kings, they now venture into publication. They are now in the thick of things making their magazine the premiere urban living guide in the metropolis, for free. The Cutting Edge, a monthly publication, is to mean to inform and educate the 20-35 age brackets. AB income class.
“It is informative and educative in nature, in our first issue, we featured a politician, Dick Gordon, and a showbiz personality, Amanda Page. We also tackle issues like safe sex, depletion of the ozone layer: we also inform people on where to go. Our circulation is 15,000 but we plan on going nationwide later this year,” he reavels
Singh narrated that it was Teddy’s idea this time to put up their own publication. “Teddy looks his high school in England and he had his own publication. Nacho is now efficient; you can’t put all your eggs in one basket, so to speak. We decided to come up with this one because it’s been proven to work in Hong Kong and new York.”
The need for a free-of-charge. Urban living guide in Metro Manila compelled these young men to put up the Cutting Edge. In Mike’s view, “the country is progressing and a lot of foreign investments are coming in which is increasing the level of compensation. Increasing salaries mean an increasing meddle class which is the majority of the population. There is a bigger capacity to spend money so I think the market is increasing. As such, this type of magazine is needed to keep up with the pace.”
The business prospect of a fee urban magazine was not as appealing as the ones which carried a price. Advertisers were not so keep on them.
“I went to them selling nothing. I didn’t have a magazine in my hand. What I had was just an idea. But after the first issue, people have been calling up and say that the magazine is great,” he says.
For the first year they don’t expect to make a profit, they want to hit at least the break-even point. But, of course, they intend to stay for long so they’re allotting 50% of the pages of the magazine for the ads. That means adding three to four pages of ads each issue.
“We surveyed all the other fee urban living magazines and we thought to ourselves we can come up with a much better magazine. A lot of these business have started but died down after a few issues. We intend to stay for long.” Singh asserts.