Supak Muennikorn: Leading the Development of the Thai Franchise Business Model

Issue : Oct / Nov 2020
 

Story by Elite+ Editorial Team

Photos by Trairong Chomchuen

 

 

As the CEO of Siam Inter Farm Co, Ltd and founder of Thailand’s Food Franchise Institute (FFI), Supak Muennikorn, has become a leader in the development of the Thai franchise business model as he continues to expand the operations and product lines of Siam Steak and EZ’s Sausages, two very well-known Thai brands.

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

Can you tell us how Siam Steak got started?

 

My mother actually started Siam Steak 45 years ago, when it was called Siam Hamburger Steak because Thais at that time knew what steak was, but not hamburgers. So, we had to educate them. We were the first Thai fast food brand and introduced a very unique product.

 

First, in the burger industry, hamburgers come as a premium beef patty often topped with cheese and bacon. However, at Siam Steak, we top our burgers with cheese, an egg and a slice of pineapple. Cheese is actually a healthy food as it’s a dairy product and highly nutritious. We added a slice of pineapple to give it a Hawaiian flavour, which represents the United States. Moreover, when a pineapple is grilled, the burger’s flavour and juiciness are emphasized, creating a more exciting flavour. This is our first uniqueness.

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

Next, what makes us different is our location. When we began, we focused solely on educational institutions, from kindergartens to universities. By doing this, we created and have maintained our brand awareness among consumers since they were young. Over time, they have become our loyal customers. In addition to establishing Siam Steak, my mother was a teacher. So, she focused on every minute detail, including hygiene and cleanliness, food quality and taste. She considered every facet to the point that she invested in building her own factory to maintain control and top-quality standards. All out equipment, technology and know-how have always been imported from Europe and America. 

 

The third area that we have always stressed is customer relations, ensuring that our customers receive what they want, trying to go beyond their expectations. This is also why, after creating a strong market within educational institutes, under my direction we have begun expanding further to be available to satisfy our customers’ demands by opening kiosks and outlets in local markets and petrol stations. 

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

Since taking over operations from your mother, what else have you been planning?

 

As I said, we are continuing to expanding, now using a franchise model while focusing even more on branding, online marketing, menu creativity, delivery services and internal management. We have already opened two branches, and the payback period seems really good. So, we plan to open two more branches in Bangkok and one in one of the provinces. 

 

All our franchisees must first be Siam Steak loyal customers; they need to love the brand and want to see it grow. We have developed close relationships with our franchisees and are committed to treating them very well. We work closely together while we maintain control of all the processes. This I strongly feel is a key to our continued success. 

 

We tell them that if they love our company and make every effort to make their business successful, just like my mother, our founder, did, we will be there for them and back them up completely. This is how franchise businesses around the world, like McDonald’s, KFC and Pizza Hut have become so successful.

 

As the next generation in our company’s management, my focus is on how to expand and have our business grow. I am always considering new strategies and how to ensure the company remains strong and vibrant for my children, the generation that follows. I plan for both of my children to succeed after me. I have sent them to an international school, encourage them to have international friends and live in an international environment. I always tell my children what their grandmother did to become successful, what I am doing to carry on this tradition and what I plan for them to do when they are ready. 

 

However, I will not force them to take over the business. They can do what they want, maybe just become shareholders or if they want and are capable, the next managing director. 

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

Can you tell us about some of the innovations you have introduced?

 

Since becoming CEO, I have added two more ingredients to our toppings, smoked bacon and crispy cheese. Our smoked bacon takes four days to produce using wood we import from Europe, giving it a preferred aroma and very unique flavour. 

 

I was also the one who initiated our expansion outside of educational institutions. I have been focusing on locations along the motorways, in petrol stations and inside shopping malls, for instance. 

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

You have also launched another brand, EZ’s Sausage, how would you compare this brand to Siam Steak? 

 

The core product of Siam Steak is the burger, which actually originated in Europe. Europe has always been known for its premium beef, delicious steaks with excellent gravy. The first burgers were actually made from the leftover meat when butchering to produce quality steak. This meet would be ground up and formed into hamburger patties. So, with Siam Steak, we combined the European culture of steak with the American culture of convenience, and came up with a uniquely Thai burger brand. 

 

For EZ Sausage, we solely focus on sausages as the core product, which have their own background. Just think, sausages were first created over 4000 years ago during the Greek or maybe it was the Roman empire. Thus, the roots of our products are pure European. Yes, I know, many cultures have sausages as part of their cuisine. There is the Sai Ua of northern Thailand and the Isan sausages, but we focus on a European taste and ingredients.

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

Next, we would like to ask you about Thailand becoming a hub for international franchises.

 

I can honestly say that Thailand has emerged as a world franchise hub, particularly for ASEAN, because of its central position among the CLMV, countries of Cambodia, Laos, Myanmar and Vietnam, as well as Malaysia and even Singapore. All the international chains that have come and established themselves in Thailand want to expand their operations to include our neighbours, if they haven’t done this already, like in Malaysia and Singapore. However, the CLMV countries are less advanced. They still need Thailand’s help to become successful in this region. 

 

There are also local Thai brands that hope to expand into the CLMV markets, and there is still a lot of opportunity to do this. Today, in Thailand, we even have brokers who will arrange business matching sessions to help Thai venders contact potential CLMV partners and help clear all legal procedures. One business sector that really helps companies that want to expand abroad are Thai banks, especially those with branches in these foreign countries. Bangkok Bank has been especially helpful to me. Then there are the embassies and commercial attachés, in addition to the ambassadors, who really focus on promoting Thai brands and businesses abroad. They are always organising events to promote Thai brands.

 

One thing that a lot of Thai brands forget when expanding abroad is they don’t do enough research on the particular country they are looking at. In-depth market research and solid business plans are essential when planning to expand a brand abroad. They need to keep in mind that they are not so well known, like an American brand. Knowing a market is essential. This information can be obtained through banks and the ministry of commerce in these different countries as well as in Thailand. Moreover, a company must find the right business partner, one they can trust and depend on. This is the second factor essential for success in another country.

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

What suggestions do you have for Thai entrepreneurs who want to expand into CLMV countries, particularly in the fast-food market?

 

The two main targets Thai entrepreneurs should first focus on are tour groups travelling to a particularly country they are interested in and the middle-class consumers there. A reason for this is that where foreigners patronise, they are usually more discerning and expect a certain standard of service and food quality. If you meet their expectations, you can create further trust within the new community where you are expanding. Moreover, there is no need to educate foreigners as to what fast food is. Plus, these people have money to pay for the food we are offering. Generally, it’s good to look for locations in or near tourist attractions. This is because in addition to the tourists, the residents are usually more affluent and have the ability to pay for higher priced food. Tourists will serve as influencers at the beginning.

 

In every CLMV country, there are popular tourist areas like we have here in Thailand. Location is essential when expanding a business, especially in a place where we are not familiar.

 

Another aspect Thai entrepreneur should focus on is creating brand awareness. This can often be done by using local celebrities, people who are well known and reflect certain tastes and values. These people can help boost brand awareness, which is vital to succeed. You don’t just need to use them in advertising. Now, you can have them promote your brand through their social media channels. You can also hire them to dine in your outlet. This is a great way to stimulate word-of-mouth promotion, which has been proven to be the most effective. And then sales promotions can draw customers as long as it doesn’t damage the brand’s image. 

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

Now, with the Covid-19 pandemic, have you had to change your business strategies? If yes, what strategies have you adopted?

 

Covid-19 is something no one ever thought would happen or probably planned for. It has forced everyone to change their business models. If people are still thinking that sales are only made at the front of a store, then they are wrong. However, if there are no other platforms to use to replace a store’s operations, then it is necessary to change its location. When shopping malls were forced to close, stand-alone stores became what franchise owners began to look into.

 

Sales through online platforms is also something store owners should consider if they haven’t done so already. However, most, I think, have adopted new strategies as they now partnering with online platforms.

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

When we set up an actual outlet in a particular area, we only serve a group of customers within a three to five-kilometre radius. However, when we set up a store online or partner with an online platform, our customers will fall into a much larger catchment area, which could be the same as our competitors. To succeed online, our outlet, or brand, has to be known well enough to be recognised on a platform’s feeds. To support these endeavours, we have had to do a lot of promotions on different online marketing channels such as Facebook and Instagram, to increase brand awareness and knowledge about our new sales channels. Our delivery platforms then need to link up with these so we can answer our customers’ demands easily and conveniently. Setting up a store on an online platform doesn’t mean that you will be able to sell. Nevertheless, the delivery model store is still one of the models that every store should now emphasise.

 

Another model we have been considering is the “ghost kitchen”, where the only investment is in a kitchen; all orders are only available online for delivery. The next step could be to franchise “ghost kitchens”, which are often home based. With less required investment, I believe this form of franchising will become the trend next year. It is already happening in New York and other cities in the US and Europe. Everything will be digitalized, as the majority of consumers who order online belong to Generations Y and Z, who are very tech savvy. People will be able to be more independent. Those who want to open such a business will be able to do it wherever they want, as long as they can provide easy access and delivery to their products.

 

It is very important today for every business to have a presence within the digital world. Facebook, Line, Instagram, YouTube and Tik Tok are actually just some of the digital platforms where a business needs to have a presence to succeed. These platforms can be used to find new potential customers by providing easy to access information. Digital platforms are not meant to sell products aggressively, but to maintain customers and find new prospects. Because we rely heavily on a digital footprint, companies must also haver their finances in order; this is essential for a franchise business to thrive. As everything comes and goes very quickly, stores owners must be very careful in dealing with earnings and expenditures. The same goes for feedback and reviews. 

 

Supak Muennikorn:  Leading the Development of the Thai Franchise Business Model

 

In conclusion, you are now very involved in the Food Franchise Institute (FFI). Can you tell us something about this? 

 

FFI provides knowledge and insight in everything a franchisee must know. In one course, we examine street food franchises such as 5 Star Chicken (Gai Yang Ha Dao), Chaysee Bamee Kieaw and many others. Another course we offer is restaurant management.  We go through each step of what a manager or director must do to start up and then expand their business. Currently, we are collaborating with Kasem Bundit University, which has established the Food Innovation and Incubation Center (FIN) to provide broader knowledge on franchise management to members of the private, public and government sectors, and we now offer free Zoom sessions for interested persons.

Anyone who seeks help, we are working to make it readily available.

 

 

 

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