Financial Adviser: 5 Business Lessons Everyone Can Learn from the Founders of Frankie's New York Buffalo Wings
In the competitive world of entrepreneurship, resilience and innovation are the cornerstones of success. Ed Firmalo and his childhood friends Kevin Te and Kevin Tanedo embody these qualities.
Their journey, from a series of failed food businesses to the creation of the immensely successful Frankie’s chain of restaurants, is a testament to the power of determination, learning from failure, and strategic thinking.
Firmalo had attempted to enter the food business in the past, trying three different food concepts, all of which ended in failure. Undeterred by his previous misfortunes, Firmalo decided to give entrepreneurship another shot.
On this latest venture, he embarked on a new food concept called The Chicken Factory. Faced with limited capital due to earlier losses, he invited his childhood friends, Kevin Te and Kevin Tanedo, to join him in the business. Their first business together, however, failed to gain traction and eventually folded after just four months. While most individuals might have given up at this point, Firmalo, Te, and Tanedo persevered.
The trio refused to be discouraged by the closure of The Chicken Factory. Instead, they decided to pivot and explore a new concept by focusing exclusively on chicken wings and liquor, a combination tailored to appeal to a niche audience, particularly after office hours. This marked the birth of Frankie’s New York Buffalo Wings.
In 2012, the first Frankie’s outlet was established at City Golf driving range in Ortigas. Word of mouth began to spread, and within just six months, the business started gaining a substantial following. The quality of their chicken wings became the talk of the town, attracting a growing and loyal customer base.
One of Frankie’s patrons was a leasing officer from SM Megamall who invited the trio to set up a stall in the food hall area of the mall’s fashion hall, which would prove to be a game-changer for Frankie’s.
The food stall flourished beyond expectations, encouraging the mall to invite the trio to open outlets in other locations. Fast forward to today, Frankie’s boasts a total of 19 outlets and has set its sights on closing the year with 21 locations.
The journey of Frankie’s from adversity to triumph serves as a beacon of hope for budding entrepreneurs. It emphasizes that failure is not the end but a stepping stone to success. By embracing innovation, learning from setbacks, and seizing opportunities, even the most challenging paths can lead to remarkable achievements.
How did Frankie’s differentiate itself in the competitive food industry and pioneer the offering of chicken wings in the Philippines? What insights can we learn from the founders’ ability to adapt and their willingness to pivot when faced with challenges?
Here are the five business lessons everyone can learn from Ed Firmalo, Kevin Te and Kevin Tanedo, founder of Frankie’s New York Buffalo Wings:
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1| Know how to pivot from failures and succeed
Failures provide valuable lessons and insights. Pivoting from failure emphasizes the ability to learn from past mistakes, adjust strategies, and persevere in the face of challenges.
Firmalo and his partners embarked on a journey that exemplifies the art of pivoting from failure to success. When their first Chicken Factory venture in Libis proved unsuccessful, they returned to the drawing board and shifted their focus to buffalo wings.
Recognizing the gap in the market for a value-driven, casual dining experience, the partners decided to take the gamble despite their initial hesitations due to past failures. They ventured into uncharted territory with the confidence that they could make it work.
“Before we started our business together, I had three previous food ventures, all of which eventually closed, and I would consider them as failed attempts,” Firmalo says. “We were all high school classmates. We came from Xavier School. That’s how we know each other. We were around 25 years old.
“One night, we met up to discuss business. At that time, kaka-close down pa lang nung third venture ko noon, and during that conversation, we agreed to do business together because we all love food, and that's how it all began.
“The very first concept we started was called The Chicken Factory. We offered a variety of chicken, like Hainanese, Taiwanese, buffalo chicken, chicken satay and even chicken teriyaki from different parts of the globe. When we put our first outlet in Libis, the location didn't work out. After four months, we had to close it down kasi we weren't even breaking even. We went back to the drawing board and we decided to focus on buffalo wings.
“We felt that it's a product that is not a fad, unlike some others that die down after a few months or years. We wanted a product that could truly endure the test of time. We saw the potential of buffalo wings because, just like pizza, for example, it's very timeless.
“We also felt that there weren't enough players in the market. When we surveyed the competition, we thought we could provide better value and create an ambiance where people could hang out. Kasi when we observed the offerings of other players, we found that they were more fast-food-oriented and the wings were small. In terms of value for money, we thought we could do better, so we decided to focus on that.
“Back then, City Golf in Ortigas was a very popular hangout spot for college kids, so we were always there. We frequented the place. We believed that it was the best location, so when we decided to go with buffalo wings, we set up a meeting with them.
“We only had the concept back then, and when we pitched it to them, they told us that our competition for the spot was relatively established brands. So, parang we thought na baka malabo na. Fortunately, after a few weeks, we received a call. We were pleasantly surprised that they gave us the spot.
“Actually, we were hesitant kasi nga our previous concepts had failed, and then a spot became available. So parang we were scared to jump in na naman kasi hindi kami sure eh, parang what would we do?
“But we decided to take a gamble on this, and it was basically a fresh concept that we hadn't tried before. At least we had some guarantee that there was a market in the area.
“Hindi ko nga alam why they wanted to work with me kasi tatlong lugi na ako, tapos lugi pa ulit yung first venture namin together. When we got the spot, we instantly worked on the menu along with Kevin's mom, Auntie Grace, who loves to cook. We tried a lot of flavors, a lot of chicken wing flavors.
“Our target market was mga call center agents, golfers and people who would go there to eat and drink din in the driving range and also people from the business district in Ortigas.
"I think, based on that market in the area, we felt like the Frankie’s concept would work better because it's more casual dining with drinking like beers,” Te adds. “Right now, there are several chicken wings concepts. Back in 2012, there were a few players and the vibe was very different. There were a few, but we felt the market was very young.”
2| Know how to thrive with limited capital and overcome challenges in business
Growing a business with limited capital is important for its resilience and long-term success. This approach instills financial discipline, focuses on core competencies, and promotes profitability through lean operations. It also fosters a bootstrap culture that prepares the business to mitigate risks, and builds a strong foundation before scaling up.
When Firmalo and his partners opened their first outlet, they grappled with limited resources. This prompted them to take on multiple roles, personally managing diverse facets of the business. They even had to bargain with their contractors to secure affordable costs within their budget.
They also faced stiff competition from well-established neighboring establishments that had been serving in the area for years, making the business struggle in the first six months. Yet, gradually, the power of word-of-mouth began to work in their favor. Ultimately, their perseverance paid off.
“During the early days, kasi, we had very minimal resources, Firmalo says. “For example, I would handle operations and marketing, and I would also assist with managing suppliers. Kevin naman was responsible for the photo shoots of the menu and everything else kasi our capital was really minimal, so talagang we had to do a lot of things ourselves.
“When we had our first outlet, we talked to a friend who was an interior design student. She was not even a graduate yet. We showed her the design we wanted, and I told her the capital we had and the budget we could work with. If you ever visit that branch, you'll see that we have many DIY elements in that store. So we preserved some of them to maintain that feel, you know, so that was one challenge.
“We also negotiated with our contractor. We actually almost begged the contractor to give us a very good price. And we got some equipment from some of the previous businesses that closed.
“When we did our first food tasting, it was mostly the three of us doing the eating. We would finish three or four kilos of wings. Initially, a big chunk of our menu came from Auntie Grace, but along the way, we developed our menu with the help of other employees. Right now, we have our own R&D team.”
“The challenge in the beginning was that all the other establishments beside us were already well-established,” Te adds. “They had been there for many years. So we were like the new players in town, and we struggled. I mean, there were good days and bad days, but for the first few months, we were struggling.
“Whatever we would earn, we had to reinvest in the store. So, for the small things that arose unexpectedly, we had to allocate funds. We earned this much, and we had to fix this, and then we had to fix that. But I think word-of-mouth began to spread. Gradually, we started gaining more customers.”
“After six months, we would meet and talk,” Tanedo says. “Initially, we had only targeted X amount, but slowly, we exceeded it by a few thousand. It wasn't like we reached it all at once. Instead, it kept on going up. It was a gradual climb. We were seeing that parang, 'Oh, this is doing okay. I think it can work out.'
And yung mga prior months to that, there were people telling us, and I can't forget this, I was with my friend outside of the restaurant, eating. One of his college friends told us that, you know, this business won't last if you keep on doing it this way.
“I was even looking at him pa nga and thought, 'Wow, grabe naman ito, ang harsh.' That’s one of the things that really stuck with me, making me believe that we were not going to make it.
“When we slowly saw the sales picking up and people started to come in, even random people who were friends of my siblings would tell us, 'Hey, we know Frankie's.' That's when we started to feel that we were getting recognized, and people were beginning to come here to eat."
3| Know how to build a brand through consistency and quality
Consistency and quality are the building blocks of a strong brand because they foster trust, customer satisfaction, differentiation, loyalty, and even the ability to command higher prices. All these elements contribute to a brand's long-term success and growth.
The trio prioritized the consistency and quality of their product by conducting extensive research to understand the origins of buffalo wings and opted for an Italian-American name, Frankie's, to align with their brand identity accurately. This decision set the stage for maintaining brand consistency.
Once they created the brand identity, they identified the right market to introduce their brand. As the business slowly became profitable, they reinvested their earnings into high-quality fryers, recognizing these as fundamental to their operation's success. They also ensured consistency in both size and flavor. Even as they expanded their menu, their core focus was to refine their existing offerings and upholding consistency across all their stores.
“When we did the research, we found that an Italian American couple from Buffalo, New York invented the Buffalo wings so we said na kailangan Italian-American yung name,” Firmalo says. “It can’t be Eduardo’s or Kevin’s kasi that would be off-brand. We wanted it to be accurate. We thought of Frankie’s because coincidentally, the names of the couple (who reportedly invented buffalo wings) were Frank and Terresa so we named it after the guy’s name, Frank.
“From day one we were very active on social media. I think it was just a good location to begin with, we learned from our past mistake with the first business. So we really chose a good location. We felt na yung perfect market for our brand eh, yung City Golf. That really gave us the exposure we needed as a new brand for people to try us kasi, at the end of the day, no matter how good your product is, if they cannot see you, if they cannot try you, then it's going to be very difficult. So I think from the get-go, it was a good location for us. It was for me, I think maybe the perfect location for a start para magpakilala.
“Keeping the quality consistent was a challenge, especially because we had limited capital. There were many pieces of equipment we wanted to buy, but we couldn't afford them all right away. The first fryer we bought, during our first weeks of operations, was already causing us a lot of problems with technical difficulties. We had orders that took 45 minutes to an hour, and customers were giving us a bad look. These were the challenges we faced in the beginning. Once we started making money, we invested in good fryers kasi yan yung pinaka-bread and butter namin.”
“One thing we kept consistent was our food quality because we were known for selling big wings,” says Te. “Our chicken wings are significantly larger compared to other restaurants out there, so we kept that consistency, even with the flavors. I think that's why people kept coming back because our food has always been very consistent.
“Usually, at least every year or every other year, we add a few new products. But typically, these are new flavors for our chicken because it's our specialty. For instance, when people associate Frankie's with wings and then they discover new chicken wing flavors, it really gets them excited to try them because that's what we're known for.
“We've also introduced some pasta dishes and appetizers, and we've even added burgers,” says Firmalo. “However, more than introducing new items, what's most important is that we continue to refine our existing offerings, working on ways to improve and maintain their consistency. Because as you expand, the real challenge is keeping everything consistent across all 19 stores or multiple locations.
“What we did correctly was reinvesting everything we earned into equipment to ensure that our quality remained high,” Tanedo says. “Even as the market grew, we were able to maintain the same quality. As the market expanded, it became more challenging to consistently provide the same level of quality to a larger number of people. So, I think that's probably the best action we took, without relying heavily on marketing events or other strategies. We simply focused on quality because the market was already there.”
4| Know how to take calculated risks and strategically expand the business
Taking calculated risks is integral to the success and vitality of any business. These risks propel growth, innovation, and competitiveness. They enable businesses to adapt to a constantly evolving landscape, providing a unique advantage in the market.
When the trio received an invitation from SM Megamall, the offer presented a unique challenge because it involved a food hall setup that is different from their established reputation as a restaurant and hangout spot.
They were initially hesitant, but took the offer after evaluating their risks. Their leap of faith eventually paid off as Frankie’s became the premier tenant in the food hall, which opened doors to countless opportunities for them.
The experience reshaped their perspective, highlighting the strength of their food as a standalone attraction, devoid of any additional frills. This success prompted them to build their team for expansion.
Having learned the importance of location from their first business, the trio managed their risks by selecting their locations carefully. Research and area scouting became standard practice. They assessed the crowd dynamics, rental considerations and compatibility of the location with their brand.
“We were quite busy with our first branch, and after a year and a half, we received an offer from SM Megamall,” says Firmalo. “By that time, we had just hired our first restaurant supervisor, so we finally had some help. Before that, it was just us, or me, directing the team. However, when we had our first restaurant supervisor, we received management assistance, which was crucial in allowing us to decentralize the workload.
“When Megamall made the offer, we took some time to think it over because the setup was more of a food hall type, quite different from what we had become known for in City Golf where we were known as a restaurant and hangout spot.
“In this new setup, our main selling point talaga would be food, not the whole package of food, beer, and ambiance. Initially, we were hesitant, and just as we were about to decline, Kevin suggested that we should take the risk. So the three of us agreed and said, ‘Okay, let's do it.’
“We felt the risk was somewhat minimal because it was a food hall with a smaller space, not a full-fledged restaurant. Eventually, we decided to give it a shot, and it turned out to be a great decision. We became the number one tenant among the 10 in that food hall, and it opened doors to more opportunities for us.
“We came to realize that our food could really stand on its own without the need for beer or other extras. In terms of labor costs, we found that the food hall is very efficient because it’s over the counter. The seating capacity of the food hall is huge. It can accommodate up to 500 people compared to our restaurants, which can seat maybe 60 to 100 people. Although we share the food hall with eight other tenants, being the strongest tenant, we have a big chunk of the seats allocated to us.
“This prompted us to start hiring key personnel. We didn't have an office back then, but we soon realized the need of having a warehouse and a small office. At that time, we were also building our team. We were getting a lot of offers, but we couldn't accommodate all of them due to logistical challenges. We wanted to be ready first so we built the team muna before we started becoming more aggressive in our expansion.”
“We tried to open two to three locations per year, and because everything was company-owned, we had to select the locations carefully,” Te adds. “We had so many locations we wanted to open, maraming offers but we couldn’t do them all for lack of resources.
“We would also conduct research and scout the area. If there were many people frequenting the place, we checked if it attracted a drinking crowd, a family crowd, or a restaurant crowd. I think we learned our lesson na from our failed business that location is key. So we made sure to do our research.
“We also focus on the price. Based on what we learned from our failed business, the rental cost was a significant factor, but the main driving factor is the area talaga. If we find that an area is good for our brand, then even if the rental price is a little bit higher, we would be willing to pay it.”
“Usually, we already have a good idea of the area if it’s an area that we frequently visit and feel comfortable with. We know for a fact that many people go there,” Tanedo says. “It's not like a random place that none of us have ever been to. If we are not familiar with the place, we would visit it to make sure it's a good fit for our brand.
“We also ask for data like foot traffic. If we're not that familiar with the area, we request for data,” says Te. “If the highest-performing casual dining tenant is doing well, then we know we have a good chance of succeeding there as well. Basta prime location would be our priority. Ayaw naming pilitin even if it's a good mall, for example, but the location is medyo tago and isolated, we won't force ourselves to open in such a place.”
5| Know how to preserve friendship when going into business together
Balancing friendship and business is important because it helps build a strong foundation of trust, open communication, and shared values. It also provides emotional support, aids in conflict resolution, and can lead to greater long-term success and satisfaction for both the business and the friendship.
The trio successfully preserved their friendship while navigating the challenges of business through a set of effective strategies. First and foremost, they emphasized the value of transparent and efficient communication. This open dialogue allowed them to understand each other's perspectives and address any conflicts that arose.
To further mitigate potential disagreements, they established clear roles within the business. In their day-to-day operations, responsibilities were well-defined, with one individual taking the lead. This clarity prevented conflicts over routine decision-making processes.
Their shared long-term vision and goals for the company also fostered a collective sense of purpose, strengthening their bond. They also acknowledged and respected each other's expertise, giving more weight to the partner in charge of the business.
“I think it's not always possible for us to agree with one another, but the key is being transparent about everything and communicating effectively,” Firmalo says. “I think the lines are clear. We've heard of other businesses where everyone wants to have a say in everything that happens. Thankfully, in the day-to-day operational aspect, it's clear that I handle that part. When it comes to major decisions, I consult with them.”
“To add to that, we have regular meetings, at least once a month, ever since we started in 2012,” Te says. “The benefit of meeting regularly is that we all stay updated on what's happening. Overall, our long-term vision and goals for the company remain aligned.”
“But at the end of the day, to add to their points, in case we come to a decision where the vote is split, it's not as simple as a 2 to 1 vote, depending on the matter we're deciding on,” Tanedo says. “I believe that Ed's input carries more weight since he's the one dealing with day-to-day operations. His suggestions tend to be more valuable in terms of their significance. Both of us also make an effort to listen to what he has to say most of the time. I think what keeps our group functioning well is our understanding that he manages the day-to-day operations, and we respect that and we understand how it works.”
“We also base our decisions on data,” says Firmalo. “We ask our team for the information we need when making decisions. I think that's also very crucial. Of course, feedback also plays a role in it, but for the most part, having data is very important. That's what we're always looking at.”
“I agree that there is always a risk that our friendship may suffer due to business,” Te says. “But, for us naman, our direction and vision for this company have always been aligned. We always try to keep it strictly business and not personal. On the flip side, having business partners who are also your friends is awesome. It comes with risks, but personally, I believe the rewards are greater.”
“Yeah, there is always that risk, and even though we formed the group together as friends before this venture, the risk is ever-present,” Tanedo adds. “But, I think the fact that we chose our partners specifically already helps mitigate that risk kasi we have been friends for x amount of years, di ba? We have as much experience with each other as we do with family. Even families have their fights, but at the end of the day, we set aside our differences and move on. Besides that, we have established working dynamics here. Since Ed manages the day-to-day operations, it's clear that most decisions carry more weight coming from him. But that doesn't mean our input or what we want goes unheard.”
“I'd like to think that I am reasonable,” Firmalo says. “If what they're saying carries weight, I will take it into consideration. I know when to submit if talaga mas may sense yung sinasabi nila and I think the lines were very clearly drawn talaga when we first started.
“I think fortunately naman at end of the day we are all reasonable people so lagi naman yung reason and being practical yung umiiral. We try to set aside personal matters, this is business after all.”
Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice hong@financialadviser.ph or follow him on Twitter @henryong888
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