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© 2017 by MillionaireAsia Singapore

BANKING ON F&B

January 31, 2019

 

Following the brand’s success in its home market, George has since expanded Manhattan Fish Market outside Malaysia.

 

Revenue Valley founder George Ang shares the story of his switch from corporate banking to creating successful F&B businesses.

 

For George Ang, the inspiration to start his own restaurant first took root when he was a young student working at a Pizza Hut in Kuala Lumpur. As he worked his way up from delivery boy to front of house crew, he realised that contrary to popular belief, it did not take culinary expertise to own or run a restaurant. Instead, working at the back end of the kitchen taught him that the popular fast food chain actually operates without a chef, and is based on a fixed menu run by standard operating procedures (SOPs). To George, this meant that to realise his dream, all he truly needed was a vision – and an entrepreneurial spirit.

 

Perhaps it was this vision that led George to forgo his initial career in the highly sought-after corporate banking sector and venture into the restaurant business. His move brought him rapid expansion and success, leading to the founding of regional F&B group, Revenue Valley in 2002. His own restaurant chain, The Manhattan Fish Market, has now expanded to 72 outlets across Malaysia, Singapore and Thailand and is among the more than 100 restaurants under the Revenue Valley umbrella which include New York Steak Shack and Tony Roma’s.  

 

Not everybody makes it from delivery boy to entrepreneur – George shares that the secret behind his success is his approach to challenges within the industry, and a steadfast strategy in the face of the competitive restaurant business.

 

Judicious First Steps

 

George first began his career at OCBC bank, where he quickly made his mark before moving to BNP Paribas. His dedication obtained him a promotion even during the Asian Financial Crisis of 1998, a time when conglomerates were collapsing and droves of employees across corporations were being laid off. In fact, it was during this period that he was transferred from Malaysia to Singapore to head the loan restructuring department of BNP Paribas.

 

Although he did not experience retrenchment himself, the unpredictable nature of the corporate world opened his eyes to the lack of job security. Unsettled, he yearned to take charge of his own life. “I wanted to be an entrepreneur; I wanted to be in control of my own life. And that is why, while working in Singapore, I invested in The Fish Shop in Malaysia,” he recounts.

 

While this investment marked his first foray into the culinary business, it was not until The Fish Shop began to generate sufficient revenue that he chose to transition to F&B full-time. Soon after, George, together with Dr Jeffrey Goh purchased the franchise for The Fish Shop from New Zealand and subsequently opened two more units. As he recalls, “It was not an immediate cut-off from banking to start my own restaurant. I already owned two restaurants while I was still employed at the bank.” The industry shift was a carefully planned decision, and he ensured that the right strategies were in place for expanding his business.

 

A Transformational Rebrand

 

However, The Fish Shop brand eventually collapsed in Malaysia, which is when George decided to rebrand the chain as The Manhattan Fish Market and founded parent company Revenue Valley. Now separate from the original franchise, the two partners set up a new framework for The Manhattan Fish Market, and eventually opened seven outlets within four years. They established the restaurant as a casual dining destination with a set menu run by SOPs, much like the Pizza Hut he first worked at as a student. While the final dish must always look like it is plated by a chef, George believes that the back of the kitchen should be run according to pre-set cooking standards that need to be followed step-by-step.

 

As the brand became increasingly popular, George began receiving franchise requests. “That is how we expanded, when people began to approach us and ask for the franchise. We franchised the first two outlets in Kuala Lumpur – one in Seremban and one in Klang.” 

 

Following the brand’s success in its home market, George has since expanded Manhattan Fish Market outside Malaysia.

 

Sound Strategy

 

But George soon learned that franchising was not an easy business, bringing with it the challenge of dealing with not just one’s own employees and customers, but also other entrepreneurs who each operate the business with a mind of their own. “It is in the nature of an entrepreneur to think outside the box. As we began to manage them, we realised that we actually needed to create a new department just to support the franchisees. We eventually dubbed this the Franchise Support Department,” he explains. “Today, we have about 35 restaurants outside of Malaysia that are franchised. It is a very profitable part of the business but it took many years for us to actually make money from it.”

 

Yet another one of his rules of thumb in business is the ability to identify and cut one’s losses. He admits that he has made mistakes, including sentimental attempts at furthering a loss-making venture or franchise. But his operative philosophy towards such situations is to close restaurants that are 30-40% off the break-even mark. “So far, I think our hit rate has been good, around 85-90%. This implies that out of, say, 10 restaurants opened, maybe one was a mistake,” he estimates.

 

He also believes that demographics play a crucial role in the dynamics of growth strategy and expansion. As Revenue Valley continues to expand into new territories, location-based strategies must come into play for effective expansion. In choosing between licensing and franchising, he admits his professional philosophy is that preference should vary with the market, as each market has different management needs, work ethics and cultures.

 

Raising the example of Singapore and Malaysia, George says, “Every country is different. When I entered this industry I actually thought that Malaysia and Singapore would be the same; but in terms of unit economics, each country was very different.” When examining the business model of a restaurant, the main cost is food – or what restaurateurs call the ‘cost of goods sold’ – and labour cost, he explains. “In Malaysia, my food cost is high because the local currency is of lower value. In Singapore, labour costs are high.” Apart from cost, George says cultural differences must also be considered. “In Singapore, there is a larger Chinese population and most food courts tend to be non-halal. In Malaysia, most food courts are usually halal, and that means that the food courts are also strong competition to fast food restaurants,” he explains.

 

The Dawn Of Eng Food

 

Introducing his most recent venture, Eng Food, George clarifies the intention behind its inception, “Eng Food is a fairly new company. I formed it in early 2018 with the intention to buy popular fast food chain A&W through it. The company is borne out of a partnership between OCBC, who holds equity of 10% or 12%, with the rest being owned by me and my wife.” George and his wife took over A&W in September 2018, acquiring a total of 40 restaurants. “I was very keen on this acquisition because for me, fast food is the kind of brand that you can scale in any kind of market. It is everyday food for customers – like going to a hawker centre,” he adds. Having already expanded to 47 outlets in less than a year, George beams, “It took me one year to negotiate this deal. It was my biggest purchase to-date.”

 

A&W was previously owned by KUB Malaysia Berhad. The brand has held its own since 1963 as Malaysia’s first fast food chain, pre-dating both KFC and McDonald’s. “When we took over, the plan was to rebuild the brand. I think a lot of people are aware of A&W, but perhaps a bit disappointed over how the brand was managed through the years. Our plan is to ramp it up to 100-150 outlets in the next three years and make it one of the top three fast food players in Malaysia,” he states.

 

Apart from A&W, Eng Food also owns high-end restaurant The Bar°n, with outlets in KL malls such as Pavilion, 1 Mont Kiara and Desa ParkCity. George claims, “Both The Bar°n and A&W have different strategies. For fast-food chains, strategy is very marketing-driven. But for the former, our strategy is more focused on taking tremendous care of the customers that visit us.

Having bought over the franchise for A&W in Malaysia, George intends to expand the fast food chain to 100-200 outlets in the next three years.

 

Pursuing A Passion

 

George’s email signature describes him as ‘Chief Everything Officer’, a title that showcases his willingness to take on any job within the company, including those his employees do not want. One cannot be the Chief Everything Officer without passion for every aspect of his business.

 

But despite having handed over the role of actual CEO at Revenue Valley at the end of 2018, George continues to keep himself involved in certain aspects of the business. “Every day, my job is to hopefully inspire a few people, and train young people to run our restaurants one day by sharing valuable tips. It is the ‘people-based’ factor that excites me,” he explains. Outside of his vocational passion, George also enjoys sipping a glass of wine at The Bar°n, and weekly golf sessions.

 

Considering his passion for training, what does George think it takes to become a successful entrepreneur? “You have to be thick-skinned and courageous, but I think you also need to take calculated risks. Additionally, entrepreneurs in the restaurant business need to be kind to their people. If you are going to open 50-60 restaurants, you cannot be in every restaurant each day. A strong engagement programme is crucial to keep your employees happy. The idea is to treat them with respect while ensuring that they remain accountable and responsible,” he concludes. 

 

High-end restaurant The Bar°n serves a handpicked selection of old and new world wines paired with exquisite cuisines.

 

 

This article was first printed in MillionaireAsia Issue 51 - Jan 2019

 

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