Background
“From modest beginnings to the top of the world” are the words that succinctly sum up Tony Tan Caktiong’s story, today president and CEO of Jollibee® Foods Corporation, the biggest fast food restaurant chain in the Philippines.
Born in a poor family who migrated from southeastern China to the Philippines in search of a better life, he became involved in the restaurant business from an early age when his father opened a restaurant. The restaurant became profitable with the help of all family members and this success enabled Mr. Caktiong to pursue a degree in chemical engineering in Manila.
At the age of 22, inspired by a visit to an ice cream plant, he set out to gain his own foothold in the restaurant business: relying on family savings, he seized a franchising opportunity with Magnolia Dairy Ice Cream and opened two ice cream parlors. In response to customer requests, he added hot meals and sandwiches to the menu, which soon proved a lot more popular than ice cream. Three years later, in 1978, he decided to capitalize on this development, discontinued the Magnolia franchise and converted his parlors into fast food outlets.
Trademarks and Branding
Realizing that he needed a brand name and logo for his new business, Mr. Caktiong and his family decided on using a smiling red bee. They chose a bee because of its association with hard work, and because honey represents the sweet things in life. The “jolly” prefix was intended to connote happiness and enjoyment. Jollibee invested millions of pesos to register the “bee” trademark in the Philippines and other key countries.
Helped by smart marketing and advertising strategies, the mark struck a chord with the public: “From a rather crude, strange-looking bee that no bank dared to touch back in 1978, Jollibee and his cheeky smile today have become synonymous with a truly Filipino success story that is now a source of patriotic pride. It is estimated that the Jollibee brand is now worth several billion pesos”, Mr. Caktiong points out.
“Trademarks increased a lot of value to our business”, he explains. “To the consumer, they represent either trust in the company or trust in the brand…they will remember that the brand connotes very tasty food and also the experience, the ambiance, the service, and they are also proud to be a part of that brand”.
Today, Jollibee Foods Corporation uses 8 proprietary brands (including “Jollibee” for their core fast food business, “Greenwich” for their pizza and pasta chain, and “Chowking” for their oriental food outlets), owns many trademarks (including “Bee Happy”, “Yumburger”, “Chickenjoy” and “Amazing Aloha”) and has registered all of its logos, some of them in several countries.
IP Infringements and Enforcement
The strong Jollibee brand name and its positive connotations have made it a target for free-riders and counterfeiters: “We have some cases where people will do other things like garments or shoes and they call it “Jollibee”. Overseas, they will open a restaurant or a fast food also called Jollibee, even with the same drawing”, Mr. Caktiong reports.
Conscious of the importance of protecting their brand, Jollibee Foods Corporation reacts to trademark infringements: “We have to enforce [our trademarks] properly. If you do not enforce it properly, your brand image will get diluted over time”, he continues.
Mr. Caktiong is also aware of the long-term consequences of counterfeiting for the economy and society as a whole: “Counterfeiting will destroy society in the long run…this will hurt everybody because counterfeit does not have the right quality: customers get confused by this and they are not happy…then they lose confidence in the real brand and everything will be destroyed. Therefore, overall the whole society will also be hurt”, he concludes.
Franchising
Jollibee Foods Corporation relies on a franchising model for the exploitation of about half of its outlets in the Philippines. In order to protect the company’s high quality and service standards, potential franchisees have to conform to a specific profile (self-driven entrepreneurs with good management skills, good community standing and excellent interpersonal skills).
Successful franchising applicants undergo a 3-month full time Operations Training Program (BOTP) at a designated training restaurant, supplemented with other programs that will enrich the franchisee's management and analytical skills needed in the operation of the restaurant.
However, support for franchisees does not end there: Jollibee provides advice for and assistance with restaurant layout and design, equipment specifications, furniture and fixtures, and construction management. Field personnel renders consulting services once the outlets are operational. Creative advertising and marketing programs, product development, manufacturing and logistics facilities provide further support to franchisee restaurants.
Business Results
Since its establishment at the end of the 1970s, Jollibee Foods Corporation has grown spectacularly: today, Jollibee is the leading fast food chain in the Philippines with over 50% market share and hundreds of restaurants all over the country. The company’s public listing at the Philippine Stock Exchange in 1993 broadened its capital and allowed for the acquisition of the “Greenwich” pizza and pasta chain in 1994. Other major acquisitions include the Chinese fast food chain Yonghe Dawang (in 2004) and the Chowking oriental food outlets (in 2000).
The company is also present in Brunei Darussalam, China, Hong Kong (SAR of China), Indonesia, Saudi Arabia, the United Arab Emirates, the United States and Viet Nam. By 2020, the group plans to roughly double the number of restaurants to 4,000 outlets worldwide. Jollibee’s business success relies on its smart branding strategy, complemented by strong customer orientation, superior menu line-up, innovative new products, creative marketing programs and efficient manufacturing and logistics facilities.
In a recent survey, the Jollibee group was the only Philippine company that made it to the top 20 of Asia’s best employers list, ranking 16th. Jollibee Foods Corporation ranked third among Asia’s most admired companies in 2000 and was cited as number one in overall leadership among the top ten Philippine companies. In 2004, Mr. Caktiong received the Ernst & Young World Entrepreneur Award.
Through the Jollibee Foundation, the company has established an institutionalized mechanism of giving back to the community through projects in the areas of education, leadership development, livelihood, environment, and housing and disaster relief.
Marking their Territory in the Philippines and abroad
Protecting their brands through national and international trademark registration has been instrumental in Jollibee’s remarkable success – without an easily recognizable brand associated with highest quality and customer service standards, it would have been difficult to prevail in the extremely competitive fast food market. “Intellectual property is becoming very important because you need to distinguish yourself from the others – it’s a very competitive world [in which] you need to create something unique”, concludes Mr. Caktiong.
