Financial Adviser: 5 Business Lessons Everyone Can Learn from Macao Imperial Tea Philippines Founder Avin Ong

Avin Ong’s father died while he was still in his mother’s womb. He grew up seeing his single mother selling hangers in Caloocan to support him and his sisters.

The financial struggles in his family did not prevent him from completing his education. Ong worked hard to get a full scholarship to finish high school and graduate from De La Salle University with a degree in BS Mathematics.

Ong initially wanted to work in the corporate world, but after spending three years there, and upon the encouragement of his family, Ong realized that he could achieve financial independence faster by going into business himself.

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In 2014, Ong tried his hand at entrepreneurship by opening a Japanese restaurant. He thought that it was easy to put up a food business because he loved eating out and could relate to customers looking for an excellent dining experience.

But much to his disappointment, Ong realized that running a restaurant was very demanding. He struggled to manage the day-to-day operations of his restaurant, as the business barely survived.

Despite the difficulties, Ong did not give up and used his learnings from his mistakes to look for opportunities in the food industry.

One day, during one of his travels in Macau, Ong chanced upon a little- known milk tea shop called Macao Imperial Tea. He came up with an idea of repackaging the store and bringing it to the Philippines to sell franchises.

While finalizing the rights to bring the brand, Ong started selling his franchise using a business plan to investors. In 2017, Ong opened his first franchised outlet in Banawe, which proved to be hugely successful.

Five years later, Macao Imperial Tea is the largest and the most dominant milk tea chain in the country with 230 outlets.

Ong, who is only 30 years old, is also developing other franchise brands under his Fredly Group of Companies, such as Liang Crispy Roll, Nabe Izakaya and Hot Pot, Café Kitsune, and Happy Truck.

Last year, Ong also acquired a local brand, New York Fries and Dips, with the plan of expanding it through franchising this year.

How did Macao Imperial Tea become the number one milk tea brand in the country in just five years amid a very competitive tea market?

Here are the five business lessons every entrepreneur can learn from Macao Imperial Tea Philippines founder, Avin Ong:

1| Know how to turn a small brand into a valuable business

Innovation allows every business to stay relevant in a competitive market.

When Ong brought Macao Imperial Tea to the Philippines, he wanted to repackage it by introducing changes in the design and menu, which allowed him to build better products and services.

“During those time I couldn’t afford paying very high franchise fees, so our strategy was unlike other food groups where they would get really big brands,” he says. “Our strategy was to get very small brands abroad and we make them big here in the Philippines.

“We’re lucky that Macao Imperial Tea in Macau gave us so much flexibility so we were able to change a lot of things. The store design was taken care by the Philippine team. We also improved the menu and the packaging. We had to change everything.

“We also changed the store ambiance. Macao Imperial Tea branches in other countries are very, very small, just like any other milk tea brand because they are very focused on grab-and-go. Pipila ka lang, you just get the milk tea and then you leave the shop. There is no place for you to chill and hang out together.

“Sabi ko what if I combine these two concepts and come up with a café that serves really, really good milk tea and, at the same time, you can actually hang out, too. That’s why if you look at Macao Imperial Tea in the Philippines, our stores are relatively big compared to other milk tea players.

“We want people to come in, instead of getting a cup of coffee. You can actually get your milk tea, tapos they can just sit down and with all the electric outlets whatever and they can just stay here the whole day.”

2| Know how to sell your vision that brings your idea to life

Having a vision will give your business a clear focus and the direction you want to take.

Ong sold his franchise concept by making his investors excited about the possibilities of the future and aligned on a singular goal of becoming big.

“When I started Macao, I didn’t know that it was going to grow as big as 230 branches,” he says. “During that time, ang dream ko lang talaga was maka-20 branches ako, I can be so happy na.

“I didn’t expect na parang, when we opened, all of a sudden, all the potential franchisees approached us wanting to franchise and then grabe, there were days talaga na one day mag open kami ng 13 stores all at the same time.

“I realized I was selling my vision, so when I invited all these applicants to sit down with me to talk about the brand, I realized I was not talking about the brand anymore. I was talking about my vision, parang, ‘Hey guys this is what I want to achieve. This is what I want to happen and if you guys are decided to invest in this brand, this is the journey that we are gonna go through.’

“I am so very grateful di nila alam kung kikita ba o hindi. Hindi nila alam. Walang track record. Sumugal na lang sila, so it’s really the vision. When we were selling it we wanted to be the next Starbucks. I always believe that in business, you have to identify first the gap that needs to be filled in.”

3| Know how to select the right franchisees to help you grow your business

The success of a franchise depends on the success of its franchisees.

Ong was able to expand his franchise very quickly because he created very successful franchisees who put in a good word for Macao Imperial Tea.

“The right franchisee for us, of course, is somebody who shares the same vision. That’s very important. So when we talk about vision, we just don’t talk about profit. They should really know how to take good care of the brand generally.

“A good franchisee for me is somebody who is very supportive. We expect a level of support from them as we are also supportive. Another is a good franchisee must have integrity, who knows how to do things right, because sometimes we encounter franchisees who violate our franchise agreement.

“We encounter franchisees like that. Iniiwasan din namin to grow the business relationship, so yung mga talaga nag go-grow with us for 30 to 40 branches, they are really trusted and very supportive.

“The reason we are doing franchising is we want you to take good care of your own branch, so if you really want to franchise you need to have a heart. You need to be passionate about Macao Imperial Tea. You need to love the brand and if you really love the brand you have to be the one managing the store. We want to work with passionate people.

“Alam mo naman this is business partnership. That’s how we are doing it. So far everyone is quite happy. They are the one managing it. You will see very hands-on yung franchisee. What’s really fulfilling about franchising is you will really see people establishing their company just to franchise Macao Imperial Tea.

“So dati, for example, may mga startup kami, nag franchise lang sila ng isang branch so sila lahat, accounting sila, HR sila. Ngayon they have 10 branches na and you will see them having their own accounting department, purchasing department. It’s already a company established to franchise Macao Imperial Tea, so yun naman ang nakakatuwa doon.”

4| Know how to make your franchisees your most important customers

Franchising involves partnering with good franchisees and keeping them happy and engaged to grow the brand.

When Ong launched Macao Imperial Tea, he spent the first two years growing his network of franchisees. It was only years later that he began opening company-owned outlets.

“It is actually our strategy not to open a lot of company-owned branches because we want to focus on the core of the business, which is franchising,” he says.

“We are happy that most of the franchisees are doing very, very well. We only deal with 30 company-owned branches out of 230 branches, because most of them are franchisees.

“When franchisees are happy, they want more, so ang nakakatuwa dito is that they have more than one store. They just keep on opening because they are happy with the sales and the performance.

“If we open too many company-owned, you will end up taking good care of your own needs, makakalimutan mo yung mga franchisees. Unlike other brands, yung mga bright spaces, they usually get it for company-owned, tapos yung mga not so bright, binibigay nila for franchising.

“Here we do it differently. We are not greedy, so if there are bright spaces, we offer them to our valued franchisees or to those franchisees who have been supportive to the brand.

“What’s so good about franchising also is that you get to help entrepreneurs. Kasi actually alam ko yung struggle of doing business alone from scratch. What’s so good about franchising is that makikita mo a lot, like yung second generation who want to do their own business, pero hindi nila alam how to start. So through franchising we were able to extend help, teach them and give them the system and process and eventually, makikita mo nag go-grow talaga sila as a business person.”

5| Know how to manage your risks by building a good team

Businesses that grow rapidly are those that make the best use of their resources, including management talent.

Ong ensured that as his company grew, he put the right people in the right positions in the organizational structure to strengthen his management capability for growth.

“I am very aggressive,” he says. “I acknowledge the fact that every business has risks involved and even if it’s risky, for as long as I have a good team, for as long as they believe in my ambition, in my plans, in my execution and in everything, I really just have to gamble.

“When I started hiring people, I couldn’t afford hiring professionals with experience, so I did my headhunting through LinkedIn and Facebook. I would just announce and ask people to apply. Yung mga na-hire ko, may experience naman pero di alam how to teach me to do things. It was me teaching them how to do things.

“We started with a very small team. I had an HR manager and an accounting officer, and I was the operations manager, marketing manager and the head of everything. That’s how we started”

“Noong medyo nagkaron na ng income yung company, that’s when we started investing on people. Now you will see a lot of managers who come from other food groups. You will see a lot of professionals here teaching me how to do things, so slowly we are trying to professionalize everything.”

Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice [email protected]viser.ph or follow him on Twitter @henryong888