Chicken out? Serve Chickenjoy: How Jollibee took on McDonald's

Jessica Fenol, ABS-CBN News

Posted at Oct 25 2019 10:30 AM | Updated as of Oct 25 2019 12:39 PM

Versions of Jollibee’s standing bee logos. Photo: Ernesto Tan Mantiong

MANILA -- Instead of chickening out, Jollibee offered fried chicken and focused on a delicious menu, its CEO said, recalling how the firm took on McDonald's to become the Philippines' largest fast food operator.

When McDonald's entered the Philippines at the start of the 1980s, Jollibee only had 12 stores. The young chain's founder, Tony Tan Caktiong, hired a foreign consultant to map out a strategy, said the current CEO, Ernesto Tan Mantiong.

At that time, Jollibee stores were behind in look, equipment, systems and process, except in one area: taste, Tan Mantiong told a recent dinner roundtable with businessmen in Manila.

"Instead of chickening out, we served Chicken Joy," Tan Mantiong said, referring to Jollibee fried chicken, which it eventually exported to its foreign outlets.

"We were warned that when McDonald's entered the country, it tended to wipe out local competitors. We were told to just give it up and do other businesses and not to confront the global giant," he said. "So Tony sought the help of a foreign consultant, who was an expert in corporate strategy."

ICE CREAM BEGINNINGS

A photo of an old Jollibee branch as shared by CEO Ernesto Tan Mantiong during a forum organized by the Anvil Business Club. Photo: Ernesto Tan Mantiong

Before setting up Jollibee, Tan Caktiong and his then girlfriend, Grace, set up 2 ice cream parlors, one in Cubao and another in Quiapo from a seed capital of P350,000.

"Since they plan on getting married, they applied for a franchise for their livelihood," Tan Mantiong said.

After a few months of operations, Tan Caktiong and his brothers found out that consumers craved hot meals and burgers, which eventually replaced the ice cream-heavy menu, Tan Mantiong said.

"Since we were now selling primarily hot meals and burgers, we thought it would be good to change the name of our stores," he said.

WHY JOLLIBEE?

The ice cream parlor business evolved into a burger joint a few months after the branched opened in 1975. Photo: Ernesto Tan Mantiong

Naming the business was a long process, Tan Mantiong said. The word "Jolli" was inspired by a helicopter used during the Vietnam war called "Jolly Green Giant," which the Tan family spotted during an exhibit in Clark, while "bee" was suggested by Tan Caktiong’s wife Grace.

Disney’s Mickey Mouse and Donald Duck were inspirations for the group’s mascot, Tan Mantiong earlier shared in an interview with CNBC.

The country’s largest food operator has since introduced different versions of its logo including "flying bee" and a "standing bee."

ASIA’S PRIDE

Jollibee reached its first 1000th store milestone in 2017. Today it has over 1,400 stores in 16 countries, Tan Mantiong said.

The Jollibee group has 6 brands in the Philippines and over 3,420 stores, he said. Globally, the company has a total of 15 brands and over 5,800 stores in 35 countries, he said. 

Jollibee acquired US-based burger chain Smashburger as well as the Coffee Bean and Tea Leaf brand. It has invested in Mexican-American Tortas Fronteras, and has franchise interests in other global brands such as Panda Express, Dunkin Donuts and Pho24. 

"It is heartening to know that to this day, the Philippines is the only country in the whole world where a local company beat the global leader in its own game," Tan Mantiong said.

"I’ve learned that it is important to always dream big with passion and commitment. Even when we started out, we dream big and even though many thought it was crazy. And it was that crazy dream that brought us to where we are now," he said.

Even after 40 years, founder Tan Caktiong still has his eyes on potential acquisitions or brands with "great tasting food" and a scalable model, his brother and successor said.

Looking back, with a shoebox of letters from his wife Susan to remind him of past challenges, Tan Mantiong said the company he helped build "had come a long way."

"There will be many more challenges along the way, but I truly believe that the best is yet to come," he said.