Make Money in the Philippines With Burgers?
I’ve written often about business in the Philippines. So thoughts and comments I’ve received indicate people think I focus too much on “Online Business”. The main reason for that is the barriers to entry to the online world are so low, the costs for a startup are so minimal and the chances for success are extremely high … mainly because you’re selling to the world instead of trying to squeeze a profit, peso by peso from a population which has one of the lowest per capita incomes in the world.
But many are still against the whole “online” idea. Fair enough. We all have our preferences and hooray for all who stay true to them. So today we’ll talk about ….
Offline Business in The Philippines
- 0.1 Offline Business in The Philippines
- 0.2 Why Burgers Are On My Mind
- 0.3 So If I Like Burgers So Much, Why Don’t I Open a Name-Brand Burger Shop?
- 0.4 Money
- 0.5 OK, So I’m Not Opening a Name brand Franchise
- 0.6 Except it wasn’t.
- 0.7 You Can’t Build a Business on Fellow Expats Alone
- 0.8 Build Your Business On Quality and Simplicity
- 0.9 Age Is Not A Factor, In Fact You WANT To Keep Busy Here
- 0.10 I Think This Could Be Done In The Philippines For Way Less Than $50,000USD
- 0.11 But I Saved The Best Point Until The End
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I could write a book on that subject. Maybe I should ;-). And I could make it complicated. But why not make it simple, like I did here:
Or to talk about something even simpler, did you ever think about burgers? After all I don’t think there are many of you reading this who don’t know how to make a decent hamburger or some other American delicacy, like perhaps BBQ ribs, decent bacon, sausage, ham, apple pie or doughnuts or cookies … the list could go on and on.
Why Burgers Are On My Mind
I try hard to mind my weight, but lately I’ve come to realize that a waist is a terrible thing to mind. I’m just not having a lot of good luck.
Still every now and again it’s OK to indulge in a treat for lunch and one of the things I do enjoy is a big, fat, juicy, pure beef American style burger.
In general urges like this go somewhat unfulfilled here in the Philippines. Jollibee, the largest fast food chain in the Philippines does make an acceptable. large burger, their “Champ”. But it’s fried, pan-style meaning most of the fat is still trapped inside, there’s no crust or crispness on the outside of the meat, and for sure you better remember to ask for it minus their sickly mayo-style sauce, or else it will as sweet as a beef-filled jelly doughnut.
There are many McDonald outlets and the offer various burger style meat sandwiches … if you care for McDonalds, well good for you, I don’t.
Luckily, in our local SM City mall there’s a Wendy’s outlet. The almost make the grade, they serve square patties on round buns, just like Wendy’s in the USA (At Wendy’s We Don’t Cut Corners) and the sauces and other condiments all taste American. My only critique is, once again, the meat is fried, overcooked to the max, and unlike Wendy’s in America, the meat has been frozen. Good, but it misses the mark in my book.
Also nearby, and soon to have an outlet in the mall itself, is Burger King. Although suffering from the same freeze and thaw degradation of the meat as all the other chains, BK at least cooks their burgers over a gas flame, preventing the beef patties from having that soft, gummy “fried burger” taste.
So If I Like Burgers So Much, Why Don’t I Open a Name-Brand Burger Shop?
Well, aside from the fact I don’t want to go to a basic-training type franchise training institute and be told how to dress, when to report for work, what food items I can serve, etc., there is this one little thing called M_O_N_E_Y.
To open one of these name-brand outlets you would be looking at upwards of $250,000 USD. _IF_ I had $250,000 to throw around, I sure wouldn’t dump it all into a burger pit. You have to sell a LOT of burgers to earn back $250,000 and then eak out a profit. A few samples:
Burger King Philippines: Below are the minimum financial requirements and other fees.
- Net Worth – $1.5M
- Liquid Assets – $500K
- Royalty fee – 4.5% of gross sales.
- Franchise fee – $50,000, and it is due before the restaurant opens for business.
And be assured there are at least 8 important selection process hurdles after proving your financial capacity before you can be granted a franchise and open your store’s doors.
Jollibee Philippines: Cash required up front, 25 to 30 million Philippine Pesos, roughly $500,000 to $617,000 USD. Of course all the usual revenue based fees, and rent, etc. will be added on. As by far the most successful fats food vendor in the Philippines, Jollibee can pretty well charge whatever they feel like. But others are even more expensive.
McDonald’s Philippines: Cash on hand required, Php 30 to 50 million … approximately $617,000 USD to over $1,000,000 USD. You really have to LOVE “big and tasty” burgers to come up with that much cash. Again there are all the tryipcals 4% or more franchise revenue sharing fees, landlord revenue sharing fees, etc.
Wendy’s Philippines: $250,000 USD (liquid, that is cash available, not a loan) and then 8% t0 10% of all income for franchise and advertising fees. Then don’t forget the cost of your building or rent (also with 4% or more fees on revenue) on top.
OK, So I’m Not Opening a Name brand Franchise
But couldn’t I open a burger restaurant on my own in the Philippines for less than those huge fees? The answer is, yes indeed.
I’m going to include some information I just received in an email from Susan Haskins today. It’s an article about an American entrepreneur in Mexico who is “killing it” in the burger business.
I have looked this over closely, and also done a bunch of price comparisons here in the Philippines, and I am here to tell you, there’s absolutely no reason this story couldn’t have been written about an entrepreneur in the Philippines.
Except it wasn’t.
Will you be the first?
A Mexico Burger Restaurant for a Tenth of the Price in the States
By Suzan Haskins
“It’s tough to find a place in the world with a better climate than here.” You’ll hear that from nearly every expat that lives in Mexico’s tranquil Lake Chapala region. Restaurant owner Trip Wilmot is no different.
In 2015, Trip opened Trip’s Burger in an open-air food court in Ajijic, a cosmopolitan town set on the north shore of Lake Chapala. Here, his customers can enjoy their meals in daily temperatures between 50 F and 80 F, under bright-blue sky and sunshine.
“Trip’s Burger has been profitable from day one,” says Trip. The restaurant is roughly patterned after the popular California-founded In-N-Out Burger chain, which has a simple menu. Trip’s specializes in three basic items: hamburgers of various sizes, fries, and milkshakes (vanilla and chocolate). Everything is made fresh at the time the order is placed.
“We set out to make the best burgers, fries, and shakes. We have no plans to change our menu,” says Trip. “It’s the old adage: K.I.S.S.—keep it simple, stupid…
Now one thing I want you to notice here. Even though I said I wasn’t going to talk about online business, one of the key elements I see in Mr. Trips success is, his clean, information-laden website (I doubt he spent even $500 on this website, as well as his extensive FaceBook presence … free.
You won’t sell a burger if people don’t now about you, know how to find you and know when you are open.
A web presence like this is simple to set up and something I see sorely lacking with most Philippine businesses.
“Our focus is on quality, consistency, and cleanliness, and our restaurant appeals to all ranges of the socio-economic scale. Some people can afford to eat here often and, for others, it’s a once-a-month treat. It’s a proven model. I built this for the local Mexican market more than for the expat market. Just 20% of our guests are expats.”
You Can’t Build a Business on Fellow Expats Alone
I see this time and time again here in the Philippines. Expat Joe decides he’ll open a store or a restaurant aimed at selling only to other expats. It seldom, if ever works. There are more than 100,000,000 people in the Philippines. About 250,000 are foreigners (and numerically most of them are Chinese). So expats make up about one-quarter of one percent of the population. And that sub-one percent group is spread over 7,000 plus islands and more than 1,000 miles, north to south.
Trying to make a business from only expats is a losing proposition from day one.
Build Your Business On Quality and Simplicity
Thanks to the high quality and freshness of the ingredients used, Trip says that they have no competition from the more mainstream fast-food places. With Ajijic as a proven test market, Trip is working with a group of investors—both Mexican and American—to expand the business into a chain of restaurants. “Our goal is to open three new properties in Guadalajara in the next 18 months. Then we’ll see where we are. There are 4-million-plus customers in Guadalajara…so we think that represents a good opportunity for us.”
Pick a city or metro area with plenty of people and appeal to everyone. There are a LOT of hungry people in the Philippines.
Age Is Not A Factor, In Fact You WANT To Keep Busy Here
Today, Trip splits his time between Lake Chapala and a condo he owns in Guadalajara. “It’s the best of both worlds,” he says. “While I love the hustle and bustle of Guadalajara, Ajijic is peaceful…it’s beautiful…and you really get to slow down and enjoy life.”
At age 52, Trip says he’s not ready to slow down completely just yet. “I have built a business that enables me to travel and have the downtime I would like. We are in the expansion phase and that, to me, is the most enjoyable part of any business.”
There are several advantages to being an American business owner in Mexico, Trip says. “The biggest difference is the low barriers of entry in Mexico. And the red tape is nothing compared to opening [a bar/ restaurant] in Los Angeles. To open Trip’s Burger in the States, it would have cost me 10 times as much and there would be 10 times the competition.
“It took just five months from conception to opening our doors. And it cost a limited amount of capital…just $50,000 to get up and running. It would have cost at least $500,000 back in the States. That’s because here, we don’t have to deal with any stringent county board of health or building code requirements.”
Getting certain permits has also proved a much easier task in Mexico. “We do sell beer,” says Trip. “You have to in Mexico. It’s just part of the culture. Here, I got my liquor license in 24 hours and it cost me $200. In the U.S., it would have taken months to get and cost me 100 times as much—upwards of $20,000.”
Would he encourage others to explore business opportunities in Mexico?
“Absolutely,” says Trip. “My advice is to take your time and get to know the market. Then take the skills you’re good at and leverage them. This country is full of opportunities for those that have an entrepreneurial spirit.”
I Think This Could Be Done In The Philippines For Way Less Than $50,000USD
But I don’t have time (or words, I’m up to two thousand already) to accurately research current costs, but especially if you start small and “bootstrap” the business … avoid debt! … I believe you cold be operating for $10,000 or less.
But even at $50,000 this is a viable, sustainable business for less that 1/10 of what a “name brand” burger shop would cost you.
But I Saved The Best Point Until The End
How true that last sentence of the article is, even though the author was talking about Mexico, it’s equally as true for the Philippines.
“This country is full of opportunities for those that have an entrepreneurial spirit.” Stop looking for a “J*O*B” in the Philippines and start making money standing on your own two feet (or in Filipino, hilahin ang iyong sariling buntot,) literally “Pull Your Own Tail”.
You can even Make Money in the Philippines With Burgers.