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Big thumbs up to Mang Inasal!!
Lessons from Mang Inasal & Jollibee: Why build if you can buy?
While the rest of Philippine society prepared for the recent super typhoon called Juan, a super business deal last week has surprised and impressed most business people — the recent sale of Mang Inasal fast-food resto chain’s 70 percent shareholdings by young Iloilo-born founder Edgar Injap Sia to Jollibee for P3 billion.
Edgar Injap Sia is one of the fast-rising business achievers this writer has recently cited in this column; I also invited him to be guest speaker at the monthly dinner meeting of the Anvil Business Club.
Fluent in English, Tagalog, Hokkien, Mandarin and Ilongo, Edgar Sia shared that when a Pangasinan businessman approached him to apply for the franchise for that entire province, he only agreed on condition that the new franchisee shall commit to open more outlets than the existing number of Jollibee stores in Pangasinan within a few years. That guy has amazing guts, vision and entrepreneurial energy.
Congratulations to him and his buyer, the Tan family of Jollibee led by founder Tony Tancaktiong and president Ernesto “Ato” Tanmantiong, for their remarkable win-win deal. Why win-win? Edgar told me the sale to Jollibee “will be good for the long-term future of Mang Inasal,” which I agree with, due to the operational excellence and complementary nature of their business models. Instead of going through the arduous process of an initial public offering (IPO) at the Philippine Stock Exchange to cash in on his phenomenal success, Sia got P3 billion and still gets to retain 30 percent of the business which could become even more valuable as part of the Jollibee fast-food conglomerate which is No. 1 in the Philippines.
For the Tan family and other stockholders of Jollibee, instead of directly competing and trying to outflank an aggressive and fast-rising competitor (their own former attempt at Mary’s Chicken had flopped several years ago), it’s strategically brilliant and logical for Jollibee to just buy out Edgar Sia. The P3 billion they spent for Mang Inasal could easily be regained with increased sales, more profits and the overall enhancement of the Jollibee brand as the Philippines’ undisputed fast-food industry leader. Why build if you can buy? If you can’t beat your competitor, buy him! (Psssst, this is an open secret: the strategy of buying foes you can’t beat has been a strategy of our many shamelessly corrupt politicos for ages!)
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