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Ministop Philippines, a chain of 24-hour convenience stores that operate as a grocery and fast-food diner combined, has a core business policy that it has given the acronym QSC + A. It stands for “Quality, Service, Cleanliness and Assortment/Availability,” five customer service targets that are relentlessly pursued by the company and its business partners—the company prefers to call its franchisees by that name—all the way down to the store staff.

The company’s pursuit of QSC + A is evident in every part of the Ministop experience—from the customer’s entry through its doors up to the time the product is consumed. “In everything we do,” says Paul H. Darroca, business development officer of Ministop Philippines, “we think of the customer first, and we make each of our business partners clearly understand that QSC + A means always putting the customers first.”

At the store level, QSC + A translates to the five important words that Ministop trains its entire staff to say to every customer: “Good morning!” upon entry, and “Thank you for visiting Ministop!” on leaving. And as important, QSC + A has been integrated into the design of the Ministop store itself. “Ministop builds its own kitchen within the store plus the dining tables and chairs,” says Darroca. “You can actually sit down, chat, and enjoy your meal inside the store. Unlike other convenience stores, Ministop is not just for emergency grocery purchases by people who need to leave after a minute.”

A SHARED INVESTMENT MODEL

Established in December 2000 as a joint venture of the Robinson’s Retail Group, Mitsubishi Corp., and Ministop Co. Ltd. of Japan, Ministop Philippines offers a franchising package that follows the ”shared investment, shared expenses” principle. “The company shoulders at least half of the expense even if the store is being run by a business partner,” says Darroca. “We don’t only share the business with the business partner; we also share the risk.”

A business partnership with Ministop falls under two categories: the investor type, and the operator type. Regardless of the choice of business package, Ministop provides and maintains a strong and consistent support structure for its business partners’ outlets. “Seldom will you find a business partnership model that will invest equally with you in a particular store,” explains Darroca. “Even the big franchising companies out there will tell you, ‘Put out the money and we’ll give you the training, but the risk will be yours 100 percent’. But here in Ministop, if you close down, both of us lose our money.”

To provide day-to-day support to its business partners, Ministop uses what it calls a “store adviser network system.” A store adviser, who is assigned to handle five to seven stores, visits a store twice a week for assessment of performance, discussion of action points and strategic plans, and introduction of new products and procedures. “It’s as if there’s a customer who regularly goes to your store and tells you the things you have to improve on, and all of that in writing,” says Darroca.

Of that support system, Evalor Araya-Almendras, a Ministop business partner since March 2003 with two stores in Makati City, has this to say: “The store adviser stays in the store at least 3-4 hours per visit. Nagbababad talaga sila [They really focus on what they are doing]. They make it a point to remind you of strategies like proper product placement and the need to replenish your merchandise.”

Another Ministop franchisee, Ma. Encarnacion Santos, says “the store adviser regularly visits our store to monitor stock inventory, to give suggestions on how we can improve the operation of the store.”

A GREAT FRANCHISE OPTION

Santos is a housewife who used to operate a home-based snack station and canteen in Baclaran, Paranaque City, before she invested in a Ministop franchise in 2004. “Franchising makes it easier to start up your own business—[the franchiser] has established a working and efficient system. I chose Ministop because in a trip to Japan I saw [Ministop’s franchise] potential here in Manila.”

“We opened in September 2004, after making an investment of P1.2 million (in a master lease) which already included P650,000 worth of saleable goods, equipment, and building space,” says Santos. “We expected problems along the way. And just like any other business venture, we anticipated a lot of hard work and perseverance ahead.”

Systems and logistics are the other key support services that Ministop provides to its business partners. In fact, Ministop invested $1 million for its Point of Sales System (POS) alone—an online system developed by Fujitsu Japan to provide the business partners real-time sales figures at any time of the day.

EFFICIENT DISTRIBUTION LEADS TO BETTER SALES

To ensure the efficient and timely delivery of products to its stores, Ministop Philippines established the Robinsons Distribution Center Inc. (RDCI), which is located at ___x x x____. This distribution center uses the latest technology in warehouse management under a consulting agreement with Best Logistics Partners of Ryoshoku, the biggest wholesale and logistics company in Japan.

The operating costs of RDCI are shouldered by the suppliers of Ministop, and since Ministop doesn’t add any markup on the suppliers’ costs, it distributes their products to Ministop outlets at the same wholesale price. “Whatever prices we get from the suppliers, we pass it on to our business partners as is, “ Darroca says. “There’s no reason why we should increase the costs. After all, we get our income from the sales to the customers, not from our sales to our business partners.”

With each Ministop store typically having only 10-15 square meters of store space—just enough space to house 32 display gondolas—it couldn’t possibly hold more than 10 days of stock. “So what we do is to make daily deliveries to the stores,“ says Darroca. “This is a free service. We don’t charge our business partners for any delivery costs.”

BANKING ON A GOOD REPUTATION

When Evalor Araya-Almendras first saw a Ministop store back in 2001 and found out that it was being run by the Robinsons Group, she decided right away to become a Ministop business partner herself.

She recalls: “Back then, the investment wasn’t even a million pesos, and it covered everything like the franchise fee, equipment, merchandise, the POS and computer system, the training of the franchisee and store staff, and the operation manual. I had a very high expectation from Ministop, and with Robinsons as my business partner, I just knew the business would do great.”

She says that the beauty of a Ministop store is that it is meant to serve all market segments from A to D. “In my two Ministop stores in Makati, we value and treat all of our customers in the same way: we provide them good service with a smile,” she says. “And I think Makati customers are the kind of market every Ministop business partner would like to have: people who are very particular with their time and who demand fast, consistent, and prompt service.”

Over the next six years, Araya-Almendras had always strived to make her store staff happy in their jobs so they can provide excellent customer service. “No matter how you tell your staff to greet and smile, they won’t be able to do so if they themselves aren’t happy,” she explains. “Your people need to be happy with what they are doing because customer service basically starts with them. Hindi pwede ‘yung parang robot na mag-greet but hindi naman totoong happy [It won’t do for store staff who aren’t really happy to greet customers in a robot-like way].”

The usual payback period for the investment in a Ministop store is 3-4 years, but with a combination of good location, excellent management skills, and the use of best practices in customer service, that payback period can be made as short as a year—as what happened in the case of Araya-Almendras’ two Ministop stores. All things considered, she says, her strongest weapon for that performance is excellent customer service.

“For this type of business, customer service really matters,” she explains. “Your objective is to make your customers come back at least three times a week. You shouldn’t even give them a chance to sumilip man lang doon sa competitor [to even take a peek at the competitor]. You need to give them a reason to keep on coming back.”

“Since we have a common goal—profit—it’s just right that Ministop and its business partners like me are sharing equal responsibility for marketing, accounting, and operations,” she says, “and I must add that clearly understanding the nature of this relationship is a very important factor in one’s success or failure in this business.”

From the continuing robust sales performance of her two franchised Ministop stores, it looks like Araya-Almendras is indeed profiting handsomely from that relationship.