A very interesting entrepreneurial start

Dec 10, 2016

Potato Corner is a wholly-owned Filipino company that is now one of the most successful local businesses that is also reaping success in other countries. It can be found in all malls and the brand has gone from just kiosks to stand-up stores. Its amazing success, like most other success stories, started with a leap of faith and has gone on to establish it as one of the most profitable franchises in the country.

One of the original founders of Potato Corner, Joe Magsaysay, shared with Business & Leisure the company's humble beginnings over twenty years ago. It started with four partners: Ricky Montelibano, Joe's brother-in-law, and friends Danny Bermejo, George Wieneke, Joe and their wives. Ricky then was the first to start the flavoured popcorn in the Philippines which became a craze among the young Pinoys. With only two flavours, barbecue and cheese, Ricky was making so much money that he could afford a new car and a new cell phone back when these were very new and very expensive in the country. Joe, on the other hand, was working with Wendy's, a modestly successful foreign brand here, but he needed a "sideline" to earn more for his growing family. With Ricky's flavoured popcorn business as model, the idea was born: flavoured fries.

The group needed to put up P150,000.00 as starting capital for Potato Corner. Joe remembers that he didn't have the money to pitch in and had to scrounge around for P37,500.00.00, his 25% share in the business. Like him, the other members of the group also had to make loans to come up with the total starting capital, but the group of four finally did it. Meanwhile, Joe, who has been working with Wendy's for nine years, was confronted with a choice-it was Wendy's or Potato Corner. He couldn't have both, so Joe made his incredible leap of faith right there and then and left the safety of a stable corporate job for the unknown.

That was in 1992, and they opened their first store in October of that same year. It was a only a cart in Mandaluyong because, as Joe simply said, they couldn't afford anything bigger. In just thirty days, Joe was able to pay back the P37,500.00 loan he got, and so did the rest of the group. This was phenomenal success for their novel product and the group saw the opportunities that were open to them. That was the time to expand, and franchising was certainly the most promising option they considered seriously because, with very little funds at their disposal, franchising seemed to be their only option to raise additional capital.

At that time, franchising was a still a novel idea here, and the group did not have the advantage of our current entrepreneurs who have the support of organized bodies like our national franchising associations. Joe knew about the mechanics of franchising through his old job at Wendy's which is a local franchise. Undaunted, he read books and researched on the net on franchising. Armed with only the basics of the mechanics of franchising, the group accepted their first franchisee, with a franchise agreement that they copied on the net. Their first three franchises were closed on mere handshakes, Joe recalls, and they had no manuals to go by to guide them. Their gut feel for the business was so strong that they plunged into it without second thoughts.

As things turned out, their franchise business grew faster than their company-owned stores. This was because the group was bent on raising funds for their planned expansion. "It's because of franchising that we were able to dominate the market", Joe said.

Fast forward to 2006. There was an Indonesian student who studied here, got a degree and eventually went back to his native country in 2003. Joe received a call from him expressing his interest to bring Potato Corner's flavoured fries to his country. Joe was not yet interested because they were still fully developing the local market. The persistent student called again in 2004, in 2005 and finally in 2006 when Joe relented and entertained the idea of bringing the brand to a foreign country. That same year, they opened their first store in Indonesia.

In 2010, they brought the brand to the United States. It was also another student whose father used to head the security of the Israeli Embassy here who was instrumental in bringing Potato Corner to the land of French fries. The student who studied at the International School and lived at a condo in Ayala Avenue used to walk every day to Glorietta to buy from Potato Corner and wanted to bring it to the US. Joe and his group studied the market there and talked with a marketing guru in the US who actually advised him against it, likening the prospect to selling ice cream to an ice cream house. Their group, however, had more faith in his gut feel and went ahead with Potato Corner's invasion of the land of French fries.

Today, Potato Corner has over 100 stores in Indonesia, 45 stores in the United States and several others in various countries. Panama is one of these countries, and it was incidentally also a foreign student studying at the Poveda who made the first step here. In all of these countries, Potato Corner was the first to offer flavoured fries.

Starting with only a service crew of four, the enterprise now employs over two hundred in their corporate offices and company-owned stores. Some of them who have been with the company when it started in 1992 continue to serve up to this day. The company now sends the deserving ones to earn their masteral degrees in schools like the Ateneo. Joe himself turned fifty-five in August of this year and decided to hang up his worn jerseys for early retirement. It's time, he says for the company to take care of him now. Their company continues to grow and they are looking forward to having150 company-owned stores before the year ends and more stores in other countries. They are also looking forward to their 25th anniversary in 2017.

His advice to would-be entrepreneurs? "Consider franchising, and don't wait until the "fad", the strong market acceptance fades. If you have a good product, aim to achieve market dominance at the soonest time, and continue to find ways to control the business."

Mabuhay!!! Be proud to be a Filipino.

For comments & inquiries (email) sunshine.television@yahoo.com


About the Author

Ray Butch Gamboa graduated from the College of Arts and Letters of the University of Sto. Tomas. It was a course that should have been preparatory to a law degree, but the call of broadcasting aborted his plans.

At the age of 16, while still a student, Butch tried his hand at disc jockeying, landing a job at Mareco Broadcasting Network's AM stations DZBM and DZLM. From there, Butch moved on with his illustrious career as a popular disc jockey, riding the airwaves of Bob Stewart's middle-of-the-road music at DZXX, and ending his disc jockeying career at ABS-CBN's DZYL and DZQL.

From there, he stayed on with ABS-CBN, covering live the proceedings at the Manila Stock Exchange and eventually entered into the world of television sales as an account manager for the premier channel of ABS-CBN Channel 2.

In the early 70's, at the outbreak of Martial Law, Butch was one of the thousands of professionals who woke up jobless when then President Marcos declared the new status of the nation. With the closure of ABS-CBN, Butch ventured into different fields outside of broadcast. He tried his hand and with ease and success at export (Costume jewelry), real estate (brokerage), and restaurants (fast food).

In 1987, after the revolution, with the broadcast industry back to its free state, and with its irresistible call ringing in his ears, Butch made his inevitable comeback and pioneered in a local motoring show, producing Motoring Today on Channel 4 and co-hosting with local motor sports' living legend Pocholo Ramirez.

After 4 years, he ventured into another pioneering format by producing and hosting Business & Leisure, which was originally aired on ABS-CBN's Channel 2. The format eventually espoused similar ones in other different channels. But the clones in due course faded away leaving the original staying on airing on Channel 4 and eventually on Shop TV on Sky Cable's Channel 13.

The following year, the pioneering spirit in Butch spurred him to produce another TV show, Race Weekend, also on Channel 4, covering circuit racing at the Subic International Raceway after the motor sport's hiatus of 17 years. But when similar shows with duplicated formats sprouted, he decided to give way and ended the program after a year, although still enjoying unparalleled viewership.

In 1998, when the local automotive industry was in a slump, Butch contributed his share to help the ailing industry by producing another popular motoring-related show, this time exclusive to the automobile and its industry—Auto Focus, which became a vehicle for local automotive assemblers and importers to showcase their products and dwell on the industry's latest technological developments.

In 2003, Butch teamed up with his brother, Rey Gamboa who was a former Shell executive and presently one Philippine Star's business columnist to co-produce and co-host the TV show Breaking Barriers on Channel 13. It is a talk show that features guests who are in the news and in the middle of controversies. The program ventures to draw deeper insights into current issues to learn how they impact to our daily lives.

Today, Motoring Today on its 28th year of service to the general motoring public still enjoys its unprecedented loyal vierwership nationwide while Auto Focus, after 16 years has firmly established its niche viewership among automobile enthusiasts and on the other hand Business & Leisure is on its 24th year dishing out current business issues and lifestyle features.

Today, aside from writing weekly columns for the Philippine Star (Motoring Today on Wednesdays and Business & Leisure on Saturdays) and executive producer / host of weekly TV shows (Motoring Today, airs Sundays on Solar Sports Channel 70, Business & Leisure, airs Tuesdays on Shop TV, Sky Cable Channel 13 and Auto Focus airs Thursdays on Shop TV, Sky Cable Channel 13, Ray Butch Gamboa is currently the Chairman and CEO of Sunshine Television Production and Marketing Services Corp., President of Gamcor Management and Development Corp., Chairman of Asia-Pacific Realty Corporation, President and Chairman of Socio-Communication Foundation for Asia and Founding Chairman of the Society of Phil. Motoring Journalists (SPMJ)