The history of Jollibee dates back to 1975, when a Filipino entrepreneur Tony Tan Caktiong

(Tony) set up a two-outlet ice cream parlor business in the city of Manila. His father used to
operate a kitchen in Fujian (China), which was where Tony's association with the food services
business began.

Though the ice cream parlor business was

doing well, Tony wanted to do something
bigger in the foods business - in the form of a
fast-food outlet chain. His vision was inspired
by the global popularity of companies like
McDonald's (which incidentally, was planning
to enter the Philippines during that time),
Wendy's and Burger King (these two already
had a presence in the Philippines). Deciding
against becoming a McDonald's franchise,
Tony established his own chain of seven
hamburger outlets in 1978 under the name
Jollibee. In 1979, Tony and his brother went
to the US to study the fast-food business.
They spent a couple of weeks looking at the
kind of equipment used, the retail outlets, the
food served and various other things.

Tony decided to copy almost each and every aspect of US fast-food majors, particularly
McDonald's. He said, "From the start, we were willing to copy."The aim was to avoid 'reinventing
the wheel' and to benefit from tested business practices. By establishing Jollibee in 1978, Tony
pre-empted McDonald's entry into the country. Tony was aware that Jollibee could not compete
with McDonald's which had financial muscle and decades of expertise in the business.

Therefore, he decided to differentiate his

company by making it a 'symbol of Filipino
pride.' Thus, while Jollibee hired US
consultants for assistance on the
franchising and retailing fronts, it took
decisions regarding the products on its own.
All the food products were prepared keeping
in mind the tastes and flavors prevalent in
the country. Since Filipinos liked eating out
in groups and ordered different dishes, the
menu was quite exhaustive (as compared to
the limited menu offered by US fast-food
outlets). This strategy worked well and from
the very beginning, Jollibee became a huge
hit with the customers. In line with the
'copying' theme, Jollibee launched its own
mascot (a la Ronald the clown from
McDonald's), a human-like bee,3 in 1980...

The Recipe for Success

Jollibee attributed its growth over the years to its efforts towards establishing a superior
manufacturing and logistics framework; to the extra attention paid to the menu; to its marketing
efforts; to Tony's strong leadership; and to its focused approach towards globalization. According
to an article in the Asian Business Review, Jollibee also owed its success to its constant attention
to three crucial issues: innovation, testing and piloting...

Operational Excellence
On the operational front, Jollibee's quest for
excellence reflected right from the stage of
construction of new outlets. The company
used pre-fabricated material to construct
stores, thus saving a substantial amount of
time and money.

Jollibee had two commissaries located in

Pasig City and Mandaue City. While the
Pasig commissary catered to the Luzon
area, the Mandaue commissary looked after
the needs of the Visayas-Mindanao area.
These two commissaries handled activities
such as raw material and ingredient
planning, warehousing, manufacturing of
processed foods, distribution and logistics...

Serving The Customers

At Jollibee, customer service was given a lot of importance. In fact, customer service was one of
the key result areas (KRAs) on which employees were evaluated at the company. The
importance given to this issue was also reflected in the company's corporate mission and vision
statements (Refer Table I for Jollibee's values, mission and vision statements). The company
advertised extensively through the print as well as the electronic media. While the national-level
campaigns were handled centrally, local promotions were managed and implemented by
individual stores...

Serving The Employees

At Jollibee, employees received extensive

training so that they could learn the
corporate values of integrity and humility.
The company reportedly had a 'family-like'
atmosphere at work, which gave the
employees a sense of belonging and
togetherness. Not surprisingly, Jollibee was
ranked 16th in Asia and 1st in the
Philippines in a 'best employers' survey
conducted by Hewitt Associates, The Asian
Wall Street Journal and FEER in September
2001. Claro F Certeza, Jollibee's Vice
President (Corporate Affairs), said, "The
high engagement scores garnered by
Jollibee could well be a reflection of the
symbolic relationship between management
and employees where performance is seen
as something that would ultimately rebound
to everybody's growth and societal
improvement..."
Serving The Franchises

Almost half of Jollibee's stores in the Philippines were franchised. The company gave special
attention to the selection of franchising partners. According to company sources, all prospective
partners were evaluated on their standing the community, their leadership and people-handling
skills, their willingness to devote time to the management of the restaurant, and their successful
completion of the training program [much before the outlets became operational, franchises were
given training under a Basic Operations Training Program (BOTP)]. Jollibee's franchising partners
had to invest between P15 and P30 million, depending on the size of the store and the facilities
provided...

Serving The Country

Jollibee supported many social causes in the Philippines. It worked with various government
agencies to provide services such as immunization and medicine distribution. It also took part in
polio-eradication programs. In association with the country's Social Welfare Department, Jollibee
employed many hearing-impaired youth at its stores. Jollibee conducted a toy and book collection
drive named 'Ma-Aga ang Pasko sa Jollibee' to give gifts to underprivileged children across the
Philippines...

Leadership
According to company watchers, Jollibee's
success would not have been possible
without a person like Tony at the helm. Not
content with expanding the business from a
strategic perspective, Tony involved himself
in the business at the grassroots level, to
the fullest extent possible.

For instance, he regularly participated in the

weekly meetings held to test new products
and product-variants. He also frequently
visited various Jollibee stores, ensuring that
decisions taken at the board-level were
actually implemented at the store-level. This
hands-on style laid the foundations of a
confident, happy and fun-filled corporate
culture at the company...

Globalization

Jollibee's decision to expand globally seemed to have been necessitated partly by the economic
recession plaguing South East Asian countries in the late 1990s. While McDonald's decided to
'slow down' within the Philippines, Jollibee seemed to have adopted a dual approach - continue
expanding internally in a limited way while exploring the option of tapping new countries. Tony
said, "In the light of the shifting competitive environment, we have taken a broader, more global
view of our business. We are leveraging the preeminent position of the Jollibee concept and our
mastery of food- service technologies to cater to more market segments..."

What's Cooking?
In January 2002, Jollibee acquired 90%
equity of the California-based, Japanese
fast-food restaurant Tokyo Teriyaki House
(TTH) for P 19 million. This off-shore
diversification was aimed at strengthening
the company's overseas operations.
Jollibee immediately began working towards
expanding TTH, and by the end of the year
it opened the second TTH outlet.

Company sources revealed that TTH might

be extended to Philippines as well in future.
For 2002, Jollibee outlets recorded a
significant improvement in sales and
profitability figures. The company posted a
net income of P 1.05 billion on consolidated
revenues of P 20.34 billion...

Global Expansion - In The Soup?

Jollibee planned to open more stores in Nevada, Hawaii and New York during 2003-04.
Commenting on the decision to continue expanding globally, Tony said, "An important source of
growth for our corporation is the expansion of our international business."However, analysts were
skeptical about the company's chances of success outside Asia.