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How IHOP, Applebee’s franchisee in PH recovers from overexpansion

Global Restaurant Concepts shares how it put control on its rapid expansion to sustain growth.
By Maricris Carlos |

 

 

FAIL BETTER. Archie Rodriguez, president and CEO of Global Restaurant Concepts, sustained business losses in his first few years before learning how to control his company's growth. Photo by Sonny Thakur 

 

 

 

“We went from zero to 19 restaurants in a span of three years,” said Archie Rodriguez, president and CEO of Global Restaurant Concepts Inc, the franchise holder in the Philippines of California Pizza Kitchen, (the first foreign chain it brought in).

 

It also has International House of Pancakes (IHOP), and in 2015, its franchise of Applebee’s opened in Bonifacio Global City, Taguig.

 

Related: IHOP reveals new initiatives as it celebrates 3rd year in PH

 

That sounds like a sweet position to be in, but, as the owners found out, their meteoric expansion left the company vulnerable. In 2000 alone, they closed seven outlets.

 

It was a hard lesson to learn for the owners, who were unable to adequately put in the infrastructure to control leakages because the company grew too fast.

 

The company had controls in place, which worked when they only had a handful of restaurants; the rapid expansion meant, however, that they were not able to replicate the system in all of the outlets. Food wastage and theft crippled the company’s bottom line.

 

“In the restaurant business, every penny counts—you’re saving on rent, utilities, labor, food costs—if there’s leakage you can’t plug, there’s going to be an issue,” Rodriguez said.

 

 

Much better

But Global Restaurants Concepts is a much better company now because of the experience. “We’re definitely a thousand times in a better place than we were 10 years ago,” said Rodriguez.

 

“I think making mistakes is inherent to learning. Whenever you made a mistake—even as a child— the learning you had from it was stronger, and [gives you] a more solid foundation,” said Rodriguez.

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So if you fall really hard and you learn how to get back up, you will remember not to fall that hard again, he added.

 

“But if you tripped, and you didn’t really fall, you’ll trip again. You learning from tripping is not as painful as you learning from falling and breaking a leg,” Rodriguez explained.

 

The company has built such good street credentials as a restaurant operator, it is now being sought out by foreign concepts to represent their brands in the country. And the company is still on the lookout for new concepts to bring to the Philippines.

 

While the company is again on expansion mode, Rodriguez feels the company is better prepared with the right infrastructure and necessary elements to prevent any “leakages.”

 

“Even though you trust someone, even though you have full confidence and faith in someone, you still need to, from a professional perspective, set controls and checks and balances,” Rodriguez added.

 

 

*****

Maricris is the former managing editor of Entrepreneur Philippines magazine.

 

This article was originally published in the September 2014 issue of Entrepreneur Philippines magazine. 

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