Tony Tan Caktiong and Jollibee Success Story

Tony Tan Caktiong’s Jollibee has been one of the most admired, most copied, most innovative and most professionally-run company here in the Philippines. It has been the number one fastfood chain overtaking giants such as Mc Donalds and Kentucky Fried Chicken or KFC.

How did a local jolly red bee knocked down a multinational red-haired clown named Ronald? Let’s see another inspiring story of the founder of one of my ideal businesses. With its success, a Jollibee franchise has now a tag price of P25+ Million (US$ 500,000+). Wow!

Tony Tan Caktiong’s Life and his Jollibee company is another rags to riches story of an entrepreneur that truly inspires everyone. Tony was the third of seven siblings born to poor parents who migrated from the Fujian province in China to look for a better life here in the Philippines. His father began as a chef in a Chinese Temple. Not later on his father was invited to open a restaurant business in Davao so the whole family moved south. All together, they helped one another in managing the restaurant business which in turn became profitable. This allowed young Tony to return back to Manila and pursue his course Chemical Engineering at the University of Santo Tomas (UST).

In 1975, Tony and his colleagues went on a visit to a Magnolia Ice Cream plant located in Quezon City and learned that it was offering franchise when he saw a poster for it. By the month of May, with his family savings, he took P350,000 to grab the franchise opportunity and opened two Magnolia ice cream parlors named Cubao Ice Cream House located near the Coronet Theater, and Quiapo Ice Cream House located beside the bridge – the one going to ilalim – near a Mercury Drug outlet. They all worked hands-on but as the business propels, they noticed they could not do it all so they started to set up an organization hired store managers, and trained people.

Tony started with just two ice cream. Then after two years, he offered chicken and hamburger sandwiches, because customers were telling them they didn’t want to be eating ice cream all the time. They prepared the food in the back kitchen, and soon noticed that people were lining up more for hamburgers than for ice cream. Then in 1978, when they already had six ice cream parlors, they asked themselves: “Why don’t we change into a hamburger house?”

That was also the time they decided to incorporate and realized thet they needed a brand name. They were looking for a symbol that would represent the group, and because Tony was very impressed with Disneyland characters, they decided on a bee. The bee is a busy creature that produces honey – one of life’s sweetest things. They thought it would be a very good symbol to represent everybody. They decided they would all be very busy and happy at the same time, because if they were busy but not happy, it wouldn’t be worth it. That’s why they put the word jolly and just changed the “y” into “i” to form a brand name – JOLLIBEE.

“It wasn’t long before we heard that the multinationals were coming in – including McDonald’s. Friends started asking us if we were going to get a McDonald’s franchise but I remember saying, if you franchise, you can’t grow outside the Philippines”, says Tony.

McDonald’s came in 1982, but they didn’t feel threatened because they were a little naïve and Jollibee was doing very well. They found McDonald’s to be very good at everything, but it didn’t know the local culture. They knew the Filipino’s taste buds and what he liked in food, so they offered him flavorful and good-tasting products. He likes pasta, so they started offering spaghetti. He likes chicken, so they came up with good fried chicken by mixing different flavors. They also knew something important all along: Filipino taste is sweet. This is very Filipino – very Asian. He said: “If we eat anything sweet; we don’t really think it’s sweet; but try giving it to a foreigner and they’d be surprised.”

Tony narrates: “Filipinos also like to smell their food before they eat it. They want to be sure it smells delicious before they take a bite. Sometimes they would open a kettle and say, what’s this? It smells good! This was proved by the Langhap-Sarap advertising campaign by Basic [Footcone and Belding]. They did it for us initially for the hamburger, and when it became successful, we started using it as a campaign slogan for the other products.”

It didn’t take them long to introduce new products when they were starting out. The family members would discuss what new products customers would like, and without much marketing they’d bring something out – like spaghetti. Tony’s sister is also a good cook, so she would come up with a new recipe, they would comment on it, and then she’d fix the recipe before they started offering it. “Before, it was simple. Now, there’s a formal structure. There’s a big Research and Development (R&D) department and a marketing department. The marketing department gets inputs from customers and the products they like, and then communicate that to R&D. R&D then develops it. We have an internal taste panel that taste the food and comment on it, and when a formulation is needed they do it. The next step is a consumer panel test. We have the product taste-tested by consumers, and if it’s okay, we test the product in a few stores. Before it was easy, but now it takes three to six months to roll out a new product. Another time-consuming process is training our people on how to prepare and serve the new product.” says Tony.

Jollibee group has also become bigger. Now they have Chowking, Greenwich, Delifrance, and the recently acquired Red Ribbon. Greenwich pizza started as an over-the-counter pizza store at the Greenhills Shopping Center in San Juan, Metro Manila, in 1971. One time, the founder approached Tony to ask if they were interested – at that time she has 50 kiosks and having difficulty managing the business – when she asked them if they were interested, Tony said, “why not? Let’s form a joint venture.” They took over the management in 1994, but they retained the taste of her products because it suits the local market. On the other hand, they took over Chowking in 2000 because Chinese food is also very popular among Filipinos, but there was no good company serving the market. So they took over and worked on it.

“Delifrance is doing so-so. And the reason is because we’re still not used to eating bread as a meal – therefore, the market is limited to the AB classes. It can’t grow into a mass-market type. Our latest acquisition was Red Ribbon Bakeshop last 2005 to include cakes, rolls, breads and pastries in their line of products. For us to sustain a good growth rate on a long-term basis, we have to continue acquiring businesses”, Tony relates.

They had to let go of Binggo. They found that the convenience store was in a totally different industry. At one time, they had around 20 stores, but they found it hard supplying them because the volume they were buying for them was just too small to attract good suppliers. They had to let it go.

They’re also bullish on China because they’ve acquired Yonghe King and its 91 stores. “It’s making money. So there’s no pressure to turn it around; the challenge is how to expand the brand. China is huge; it’s like having several countries in one country. If we do well, we can have several thousand stores there. If Jollibee has more than 500 stores for 80 million Filipinos, how many stores can you put up for 1.3 Billion Chinese? Kentucky Fried Chicken alone is opening 200 stores a year in China. It’s doing very well”, says Tony.

“Many countries share our taste in food, and the opportunity is in going to China, India and Indonesia- countries with large populations. We usually do a very broad 10-year horizon but it’s not detailed. We have a five-year plan, a three-year plan, and a one-year plan. We have plans for China and India, but if we want to go to India, we’ll need a long-term plan. We might have to start putting Indian people into the organization and it would probably take at least three years before we sent them back. In China, we had an opportunity to break into the market with Yonghe, but because our people didn’t speak the language, we had to hire translators to help us out. We still send our people there, but they have to work with translators. We also need good people here. We’re lucky to be the leader, but it’s still a competitive market. You can’t afford mistakes because customers will leave if they’re not happy with you. The food business is still very basic. It’s still about taste. It’s still about How did you serve me? Is your place nice? Am I treated well? Do I get value? If you think about it, if we’re going out to eat, these are the basic things we look out for, but the execution is the difficult part. It’s not like other businesses where it’s the concept or the knowledge that’s difficult. Here, there’s no secret; it’s very easy, but it’s the execution that’s hard. If you ask a lot of restaurant, they know all these things. Executing day by day is what’s hard.”, Tony continues.

When asked what’s the secret of Jollibee’s success, Tony says: “If you have to ask, the secret of Jollibee’s success is sharing. We share our success with people; we give good compensation; we share any honor that comes our way. Actually, this idea of sharing didn’t come from me. It came from a friend. He said: You know why you’re successful? You know how to share. A lot of people do not share, but in Jollibee you share a lot with your people.”

Truly, Tony Tan Caktiong is another exemplar example of an inspiring entrepreneur. He had all the achievements from Management Man of the Year in 2002 to an Agora Award for Outstanding Marketing Achievement, from a Triple A Alumni Award from the Asian Institute of Management to a Ten Outstanding Young Men Award for Entrepreneurship. And to cap it all, he also won the World Entrepreneur of The Year 2004 by Ernst & Young besting other 31 world entrepreneur competitors.

On July 25, 2007, Jollibee Group launched Tio Pepe’s Karinderia in EDSA Central in Mandaluyong, it’s pilot restaurant to professionalize Filipino’s “Carinderia” Industry.

As of 2007, Jollibee had under its wing 1,385 stores in the country: Jollibee (583); Chowking (367); Greenwich (237); Red Ribbon (163); and Delifrance (35)

Overseas, Jollibee Group has 174 stores: Yonghe King in China (102); Jollibee in US (12); Red Ribbon in US (19); Chowking in US (12); Chowking in Dubai (7); Chowking in Indonesia (5); Jollibee in Other Countries (16) and one Chun Shui Tang, a teahouse in Taiwan.

Source: Excerpts from Go Negosyo and Entrepreneur Magazine.

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Tyrone is a passionate financial literacy advocate. He started this blog on November 2008 when he watched The Secret which talked about Law of Attraction because he wanted to become a millionaire and wanted to know how a millionaire acts. At the age of 26, he achieved his first million. To find out more about him, click here or follow him at Instagram

40 responses on “Tony Tan Caktiong and Jollibee Success Story

  1. I spoke with Mr. Tony Tan Caktiong about 3 1/2 Years ago during my brothers Graduation at the Ateneo de Manila University. He was a guest speaker at that time. I was impressed and inspired by his success story.

    • hi, Mr. J Ibanez,
      I would just like to asked you something, what are the usual talks Mr. Tony Tan Caktiong speak? or what is the topic he had discussed when he was the guest speaker in your school? thankyou

      please reply as soon as possible 🙂

  2. i have just noticed that the biggest business tycoons now in the country came from Fujian province in China….

    i wonder what is in that land making them the richest???hehe

    • Most of the Chinese people who came to the Philippines before are from Fujian province and I think it’s because Fujian is nearer to the Philippines compared to the other provinces. And, well Chinese people are really hardworking people so I don’t think it has something to do with their birth place. lol 🙂

  3. ang galing ni tony tan cationg i so impress to his story.mabuhay ka at mabuhay din jolibee mabuhay!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 🙂 :O :p 😀 :*

  4. I saluTE U sir t0ny tan..
    I’m s0 pR0UD THAT I bel0ng t0 a j0lLIBEe team as a service crew in j0LlibeE F.C.

  5. Ed, Galing mo to notice that the wife was not mentioned in the success story, but I know she was there every step of the success story and was Tony Tan’s true inspiration and co-creator for the business. I am wondering too why she was never being mentioned. Maybe like most Chinese wives they are just happy supporting the husband silently. She is a very smart, super kind, very down to earth and a very low key person. Grace, the wife was Tony Tan’s classmate at UST Chemical Engineering. She graduated cum laude, the only one who graduated with honor for that entire engineering school of 1975. In fact, the two of them started the ice cream houses together in 1975 right after graduation with capital from both of their parents while they were still planning to get married that same year. She was involved with the business with her husband, Tony from the ice cream house years to the Jollibee years and now heading the Jollibee Foundation as its President running very successful programs in education and agriculture. Itatanong nyo kung paano ko nalaman ang mga ito. Right? I was one of the classmates of Tony and Grace at UST. I was invited to their opening of Cubao Ice Cream House in 1975!”

    • Hi there. I was impressed with the story of JFC.. M’ Grace Tan was my sister boss at Jollibee Foundation.

    • Rhea and Will, do you happen to know how to contact Mr. Tan Caktiong or his wife? I think they were the right people to talk to regarding Jollibee’s blunder in Manila. We haven’t heard from their customer service after sending several emails. To give you a little idea what the issue was about, my nephew celebrated his first birthday at Jollibee who offered my sister the video and pictures in addition to the package. Everything was paid several weeks before the event as per Jollibee’s contract. Over 3 months after the event and several trips to the branch aside from every day phone calls to make a follow up, they finally told us that the video and pictures have been deleted. I really feel sorry to the frustrated parents who were hoping that someday they could show video and pictures of their son’s first birthday.
      We haven’t heard from Jollibee even after contacting them through email. I would really appreciate to get their contact numbers or email.

    • Sir! Do you have any idea when Mr. Leonito Fabian managed the store? I hope to find his name and his contributions in the history of Jollibee. Thank you.

  6. he’s a good businessman bt i think not a good friend at all. i met his best friend during his bachelor years in Davao, they were best of buddies. now, his buddy is far behind when it comes to wealth success. Tan never initiated to see his buddy, but their common friend who becomes Tan business associate has communication with his buddy. whenever his buddy ask for Tan contact, they always refuse. their common friend always think that his best friend will ask for Tan’s help which is unfair to judge that way. Their common friend knows the contact number of Tan’s best friend but never gave it to Tan.

  7. I would like to ask a question…bakit po kaya pinalitan ng Jollibee Corp.ang mga names na-acquired nilang company such as delifrance,greenwich, redribbon and etc…?

  8. Ang galing. Kahit kasabayan ng Jollibee yung KFC and Mcdo, nagawa parin nitong makasurvive and umunlad. Araw araw ang dami nila napapasaya. Araw araw ang dami kumikita at nakakapaghanapbuhay dahil sa kanila.

    Nakakatuwa rin na malaman na hindi sila sa chicken joy nagstart talaga. Unexpected na sa ice cream sila nagstart. Talagang nakinig sila sa mga customers. Binigay nila kung anu ang gusto ng mga customers and inayos nila business nila para mas marami pang maserve and mapasaya.

  9. The real success secret of Mcdo Jollibee and other fast food chain is its people not only the owner because they capitalize on students and young professionals…who can do jobs on a per hour basis and on a less than 6 months term…it is a savings mechanism to lesses labor cost and to avoid additional benefits like bonuses and others…if the sales were high and almost 70% of the workforce were within minimum salary…you do not need a masters degree in business to figure out the result of course profit…large and huge profit…but it doesn’t help filipinos to have a stable and decent job…the uniform was the only decent…

  10. I’m so impress after reading his successful story, I hope so that i am one of the successful entrepreneur someday. Charr maunang iskwela jud kog tarung because i believe that” poverty is not the hindrance to success” tony tan caktiong sir! Saludo ako sa yo.

  11. i am proud to be part of mc donald’s and jollibee and i am looking forward to have the same business also with high profit and stable operation.
    in God’s time

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