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people 2013-10-04

To survive, adapt to the current climate and market change and, listen to your consumers

In a candid chat with Franchise India, Eric Ho, Founder, Yo Yo Group, talks about his journey, his success and his challenges.

To survive, adapt to the current climate and market change and, listen to your consumers

We started Yo Yo Noodle in 2008. Within Yo Yo group, we have different sectors ranging from tyre recycling, export industry to restaurant industry. We grew throughout the entire UK and within a year took franchise of other countries. Then we got ready to launch in India.

On how Yo Yo Noodle spread

It’s all about setting up an initial pilot operation. A lot of people open the second store and third store and fourth store and by the second year they disappear. The difference that we did was we spend 2-3 years just on the pilot operation by building a strong foundation and a strong system.

Simplifying the system is the key; if you simplify the system so that anybody can run it, it will keep the consistency and there will be less room for errors. So the word is consistency. The other reason is keeping the core values – are we serving the freshest food, are we keeping the hygiene standards from scratch and are we keeping the customer-centric experience. If everything is documented and the training is done properly, we need to regularly monitor. So we do our checks once a month to make sure they are all scoring high.

In terms of sales, if you have a great restaurant – taste and environment – word-of-mouth is the biggest form of marketing. A lot of people spend money on different things – magazines or TV – but word-of-mouth wins hands down.

When we first launched in India, it was very overwhelming and the response was more than I expected. We exhibited at other franchise exhibitions. We got many leads and got a big database of people. The funny thing is in the UK store we found that the number of consumers there were more of Indian population. When I was approached by Anuradha Makhija who said that she wanted to take this to India, I didn’t realize how big the market was in India. When I reached here, I found that Chinese food was very popular in India and there was definitely a need for one in the QSR section.

On why foreign chains do well than Indian chains

The Indian food chains are not able to progress so well as foreign chains because the foreign chains have right systems and they are able to adapt to different markets. A lot of Indian chains, or for that matter a lot chains in China, grow within the country but they do not get out of the country. We have a lot of American companies or UK companies going global. This is all due to systems, the belief and vision of the company because a lot of global trends out there. On the other hand, the mentality in India and China are set out to fill India and China’s markets.

Journey so far

We were actually in the food business and were always involved in a restaurant. But it was while in the food business that I got into charity. We created our orphanage and our school in Kenya with 243 kids. Since these required money, we looked at different ways of making money. It was during the recession period (2007-2008) that we came to realise from the available data that more businesses were struggling but the food business was doing very well. Not all food businesses were doing well; high- and mid-end were struggling a bit. But the low-priced QSRs were booming and all stats were showing that. That is when we thought of making something happen in the QSR venture because we were in the food business for a few years.

On growth and franchise

While you are growing, the important thing is to bring in people onto the team. Running a franchise isn’t easy as there is a lot of work to be do, obviously the branding and marketing. It is not just about opening a store, taking money in and starting franchising, I think it needs to be spent back out especially in the beginning. In other words, you got to be spending all the money back out in the first few years by employing more people and being creative because branding is cheap.

I think any market is very competitive and the key is to be able to adapt to current climate and market change and basically listen to your consumers, i.e. just give them what they want.

The biggest challenge during franchising is the beginning because you have one or two stores and you are trying to sell the franchise concept to other people and they are like ‘why do you want a new one when you already have many’. That is the main challenge. As long as you have a product that is better than what is currently at the market, then you got something to sell. It is all about reaching out to a number of people. So the key is to never give up.

I find the growth is actually bigger in India because right now there are a lot of brands coming up. In addition to it, people are into hygiene and fresh food and they want that level of hygiene.

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