New life, new vision
Scarcely a few weeks after yet another major surgery, respected entrepreneur Jose P. Magsaysay Jr. was back on his feet, presiding over a meeting with shareholders in the United States via video conferencing from the Mandaluyong headquarters of Potato Corner.
He is yet to fully resume his responsibilities as chief executive of the growing company, but in the meantime, Magsaysay can relax and recuperate with the knowledge that the kiosk founded in October 1992 is running like a well-oiled machine, continuing to delight customers here and abroad with its fun and flavorful French fries.
“I’ve been lucky,” shares Magsaysay.
And there’s nothing like being in and out of the hospital for the 56-year-old Magsaysay to fully realize how fortunate he has been.
“All throughout my life, I was given a break,” he says.
An aunt helped pay for his education, for example, and when he started working, former Finance Secretary Jose T. Pardo guided him, eventually making him district manager of Wendy’s Philippines. Then he got his graduate degree with the help of the owners of Mister Donut Philippines, where he was general manager from 1991 to 2001.
And then the decision to stay small helped Potato Corner become not just big, but gigantic.
From a single kiosk in 1992, Potato Corner has become one of the Philippines’ best known brands here and abroad, with its total 1,100 branches across nine countries, servicing not just the Filipino market, but more importantly, the mainstream markets that will help ensure sustainability of its operations.
Potato Corner received the Franchise Excellence Hall of Fame Award by the Philippine Franchise Association (PFA) and Department of Trade and Industry in 2003, won Best Franchise of the Year for three consecutive years, and most recently, bagged the Global Franchise Award, also from the PFA.
Potato Corner has indeed pulled off the equivalent of selling ice to the Eskimos, as it sells french fries to the United States where it has 40 branches, but with the added twist of flavor and, according to Magsaysay, fun.
He feels that he has accomplished what he set out to do for Potato Corner, thus he has taken it upon himself to pay it forward and also give other entrepreneurs a break, too. These include those who want to get a franchise of Potato Corner (the lowest franchise fee is P100,000 for a school-based kiosk) and also those who just want to get his advice on how to grow their own companies.
As Magsaysay says, he is no longer as interested in investing in companies these days, but rather in investing in people, particularly those with the determination to rally on despite seemingly insurmountable odds. In short, people with the elusive grit needed to succeed in a hypercompetitive corporate landscape.
“I invest in people who have grit because they are the ones who will stand up again,” says Magsaysay, who does not place as much emphasis on the educational background of a potential investee but rather his or her track record in soldiering on despite adversity.
“If I can see that you are determined then we will fund you,” says Magsaysay, who has relinquished management responsibilities in other companies he has invested in to concentrate on being CEO of Potato Corner and a partner in companies in diverse fields.
He wants to be the “partner ng bayan”—and is thus exposed to some 20 companies. The return on investment is still some time coming but he is not in a hurry, knowing that at least one of these startups he has invested in practically from day one will eventually more than make up for his effort, time and capital.
“I don’t have a business on my own, I am always with a partner. Let’s take care of each other, that is the unwritten rule,” he says.
Among the companies he has an interest in is the Mercato food market, an incubator of many food concepts that have graduated to become full restaurant concepts. The plan is to bring Mercato outside of BGC so it can help develop food concepts in the provinces.
Then there’s Tai Koo HK Roast, which specializes in roast duck, in partnership with actor Marvin Agustin and other partners.
But aside from capital, what Magsaysay brings to the table is mentorship, valuable lessons he learned from running Potato Corner successfully over the years.
“The young guys value mentorship. They really see it as a good thing,” says Magsaysay, who gives advice even to those whose companies he does not have an interest in. Recently, two young people came to him to talk about their ice cream business. His time with them could perhaps have been better used to grow his own business, but he was more than happy to see and talk to them.
“I love doing that,” says Magsaysay, “Looking for possible new partners is not work for me.”
And one of the pieces of advice he shares with these budding entrepreneurs is that they should focus on what they do best and where they are most competent. There is nothing better than that, Magsaysay believes.
This is why it was a deliberate decision on Potato Corner’s part to focus on operating as a kiosk, even if there were countless opportunities over the past 26 years to “level up” and become a full range restaurant.
“What we wanted was to be the most experienced kiosk business in the Philippines. We wanted to be the master of the format. We will never be a Jollibee,” he says.
Potato Corner kept the format not just here but in Indonesia, the United States, Australia, Thailand, Panama, Hong Kong, Cambodia, Kuwait, where it brought the proudly Filipino concept that has also relied on franchising to expand its operations. Currently, about 80 percent of Potato Corner stores are run by franchisees, whom he refers to as partners, same with the employees.
Magsaysay is also a believer in the wisdom of making quick decisions and taking calculated risks. Both are important ingredients that make for a successful venture.
“I have always taken great risks, but not too much that you risk the company’s downfall,” says Magsaysay.
One of his major decision points came in the aftermath of the Asian crisis when the Potato Corner management bit the bullet and rationalized operations and cut costs to preserve the cash flow.
“You have to act fast. Decide quickly and just course correct as you go along,” says Magsaysay.
He again emphasizes the value of forging partnerships, of getting everyone in the supply chain on the same page, so that they will all work together to keep Potato Corner the biggest in its field.
“Entrepreneurship and partnerships. They are now concepts in our vision statement,” he says.
Potato Corner may already be the dominant force in its category but Magsaysay is not yet done charting new territories for the beloved brand, even if he has also taken steps to retire from the company in a few years.
Growth is still very much in the conversation of Potato Corner, which sells about 9,000 kilos a day of french fries in the Philippines alone, with plans to expand both here and abroad. On its 25th year in 2017, total system sales managed to grow by 15 percent despite competition, which he welcomes.
“Competition and saturation are always there, but we’ve never been afraid. In fact, we want them to upgrade to casual dining because that means there is one less company in our kiosk world,” he says.
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