Johnlu Koa at Lartizan, a casual dining bakery restaurant. “If you think you’re good today, in six months people might not like your product anymore.” —Photos by Lyn Rillon
For risk takers who don’t want to work for someone else, there’s the choice of putting up your own business or acquiring a franchise. Both have their pros and cons. Your own business allows you to be creative and develop your leadership. A franchise, on the other hand, provides a product or service that has established recognition and a market.
Johnlu Koa and wife Marilou Peña-Koa have both concepts in food and fashion, respectively, and have started their new ventures at S Maison. Although they keep their respective businesses within their families, the couple give their two-cents on each other’s ventures.
Fashion EBO or MBO?
As discriminating consumers hanker for more options, entrepreneur Marilou Peña-Koa, local franchise holder of exclusive brand outlet (EBO) Escada and Escada Sport, has opened her own multibrand outlet (MBO) Moressi at SM Conrad. This new boutique includes German brands such as Escada, Hiltl men’s pants, Falke socks, Zimmerli (a Swiss brand of handmade cotton inner wear), Northskull London men’s jewelry and leather goods under designer labels such as Dolce & Gabbana and Valentino. The customer has more choices at various price points and these brands have more access to consumers.
Opening an EBO at a high-end mall would have been more expensive for her. As a franchisee, she would have to abide by the brand’s rules and regulations, maintaining the uniform style of the brand and purchasing the entire season’s collection.
Still, she would recommend first-time entrepreneurs to venture into franchising because the principals would educate franchisees on concept, strategy, logistics and support them in promotions.
Marilou was a fresh graduate in business economics from the University of Toronto when she won the bid for the franchise of Escada and Escada Sport, besting an established department store. Despite her lack of retail background, the principals saw that she could do justice to the label by presenting the collection in its entirety and offering more choices.
“The more upscale the market, the more investment is needed. These clients are accustomed to the high level of service abroad, and they expect nothing less from you,” says Marilou.
Despite the popularity of online shopping, Marilou still favors the brick-and-mortar selling strategy of Escada and Van Laack. Filipinos visit the brand website to check out the prices before purchasing.
She points out buying online can be risky because the garment may not fit the wearer. Returning the product and getting a refund is a long and tedious process, she says.
Marilou’s seasoned staffers understand the role of service in luxury brands. “People are faced with too many choices. We can help by maintaining personalized service,” she says.
Principals of Van Laack have been more flexible when Marilou introduced other services and brands. It was the first men’s store to offer free alteration. To complement the shirts, she brought in Hiltl slacks and Falke socks. The target market, businessmen, are even willing to invest from P1,200 for cotton socks to P7,000 for wool.
A multibrand store like Moressi is a product of Marilou’s experience with franchise brands. It’s less costly since she has the freedom to design and display the merchandise according to her own concept. Its location at S Maison is also an opportunity to tap a new market.
Customers are even willing to spend P11,000 for undergarments, P37,000 for designer shoes or P80,000 for a bag.
“We make our prices comparable to the online stores,” says Marilou.
Venturing into an MBO is the result of decades of retail experience and creating a network of suppliers and client base.
She recommends that people who want to get into fashion retail but with no experience should work for someone else. They get exposed to the cycles of fashion trends and retail operations and how products move before they can decide.
Marilou Peña-Koa: “People want to see a wide variety when they enter the store.”
Food fancy
Johnlu Koa has been a game changer by introducing rice-eating Filipinos to baguettes, wheat rolls and ciabattas under the French Baker chain.
In 2010, he formed Teabros to acquire the franchise of Chatime, the Taiwanese international teahouse chain.
“Our competence is in retail, not processing technology. We are in a market that we know best. Flavored teas were trending already. Although there were other startups, their approach was conservative. [They were] in modest locations, not in a super prime location where 150,000 people can see your brand everyday like in MOA,” he says.
His nephew, Michael, left his banking career to run Chatime.
As Teabros’ director, Johnlu describes his job as the strategist and the taskmaster. “We have differences of opinions about priorities, values, motivation, incentives and appreciation of threats and opportunities. That’s where I come in,” he explains.
Since its launch, Chatime has been experiencing double-digit growths due to new product flavors, new stores and focus.
“The group concentrates on Chatime only. They do social media like nobody’s business and spend P1.6 million in advertisements, half of it paid by the Taiwanese principals,” says Johnlu.
A Francophile, Koa has always dreamed of putting up a French bakery-restaurant and salon. Consultant Reggie Aspiras’ most valuable advice was more of an affirmation.
“Before we opened Lartizan, she said, ‘You will never have a problem. You won’t allow it to fail.’ That gave me a lot of confidence,’” he says.
His newest venture is Mazendo, which will open at S Maison in February. This Taiwanese-Japanese noodle restaurant chain is famous for its tasty, clear-based noodles, dumplings and fried rice at affordable prices.
One of the challenges is building the customer traffic in a new mall like S Maison.
“Let’s turn this into an opportunity. We have to offer products that are excellent that you get the same experience 10 out of 10 times,” says Johnlu. He flew to Taiwan to learn noodle making from the masters, imported state-of-the art noodle and dumpling machines to make perfect dough products. The price will be as affordable as P99 for noodles.
On the differences between a franchise and owning a business, Johnlu explains that the latter provides more flexibility and is more profitable. “If something is trending, you can easily adapt to it. In a franchise, the principals ask you to stick to 80 percent of what’s in their manual. With French Baker, if I see something that’s not right I will interfere with the standard operational procedure, the people implementing them, controls and I can expand the market as far as it will allow.”
However, Mazendo’s principals allowed Johnlu to include 20 percent more products that are Taiwanese in origin. “They wanted to make sure that we won’t look very similar to other Chinese restaurants where there are too many varieties,” he says.
Ultimately, one gets into entrepreneurship with a sense of purpose, albeit with a stimulus, says Koa. “In business, as in life, there should be a trigger.”
As enterprising couples, they affirm each other’s initiatives. Marilou highlights the importance of listening to the counsel of seasoned entrepreneurs.
“It’s not always about doing what you think is right. You have to listen and think about them,” she says.