In Focus
EXECUTIVE INSIGHTS | Staff Reporter, Singapore

Why Texas Chicken's sustainable growth plan remains unfazed by the pandemic

Yang Ming Ong, the brand’s vice president for Asia Pacific, Middle East & Black Sea Basin reveals how they have been able to mitigate the industry-wide challenges brought about by COVID-19.

Texas Chicken was supposed to have their global summit in Thailand, an annual event typically attended by franchisees, regional leaders and corporate executives.

But in an instant, plans changed when COVID-19 was declared as a global pandemic last March. Even quicker was the business realities that the brand has to face, like the rest of the QSR industry.

“The first thing that we did was actually talk about what we are doing in our stores differently in order to give customers the comfort that it's still okay to come in,” Yang Ming Ong, the brand’s vice president for Asia Pacific, Middle East & Black Sea Basin told QSR Media in an exclusive interview.

Compulsory mask-wearing, temperature checks and dine-in limitations were first implemented in their Singapore stores before being carried over in Thailand, Malaysia and Vietnam.

They then worked closer with third-party delivery platforms, both regional and local. Campaigns were also launched to ensure top-of-mind awareness.

A mobile app is helping the chain’s operations in the Middle East, which has their own delivery fleet. They are now looking to enable the app for takeaway and curbside pickup.

“The aggregators are very strong [in Southeast Asia]. We also don't have our in-house delivery here,” he said. “The mobile app is definitely something we're gonna roll out in this region as well, but with two more steps to make it attractive.”

Franchisees were supported by Texas Chicken through a deferment programme, allowing them to pay only a portion of their royalties in the first part of the year and delay the payment of the balance on to a later part of the year or to 2021 in some cases.

In-store posters, social media content and videos about TC’s guidelines were also shared to them. To provide moral encouragement, Ong said they ran a number of competitions for their staff on how to make their environment safer for themselves and their customers.

“If you are a franchisee operating during COVID, there's just so much happening every day (and) every hour,” he said. “You sometimes forget about these things around morale and motivation by so in the team, I think we have a bit of the luxury to sometimes take a step back. And I guess implement these things so that the culture and the motivation stays alive.”

Adjustments to operations may have changed, but Ong said the brand’s five-year international growth plan strategy - helmed by their brand transformation project - remains unchanged and unfazed by the pandemic.

The project - a collective rethinking of their restaurant designs, operational guidelines, tone of voice, social media approach amongst others - started in 2018 before being officially rolled out last year.

The message: a change is coming in the region’s fried chicken scene.

The end goal, Ong said, is a critical mass of restaurants in their big markets. This means reaching up to 100 stores in Thailand and Malaysia whilst going conservative for geographically smaller countries like Singapore. The chain currently has about 300 stores, with Thailand and Malaysia having about 70 each.

“There's huge growth potential if you look at all the other chicken players (and) the number of stores that they have,” he said. “Now saturating the market...that's a long way to go simply because Southeast Asia in particular (has) big QSR markets.”

Flagship stores coupled with delivery-focused models
Amidst growing buzz for more off-premise-inclined models such as dark or cloud kitchens, Ong explained that flagships stores remain important in their growth approach but stressed that there’s room for delivery-focused locations to penetrate locations more effectively.

“A flagship to us is one which is in a prime location, great visibility, and can contain all the brand expressions of the brand,” he said.

“I'm not so sure about cloud kitchens yet because these don't typically have branding. And for us as a young brand, we need to have that brand awareness. But a delivery store with maybe just five or ten seats with ability for people to walk in and (do) takeaway, I think that's definitely something that we are focused on as well. And actually, it's a concept that we are trialing in some of our markets today.”

Ong primarily attributes the resilience of their growth amidst the pandemic to having country-level operators, who even expressed their optimism in looking for new sites.

“We look for partners who have some experience in some aspects of running a food retail business, whether it's on the back end, the supply chain, or the front end around real estate. One thing that's really good is that the partners in this region are very strong, which is why you see that even during a pandemic, we continue to have store openings.”

Entering new markets is also part of Texas Chicken’s brand awareness play. After debuting in Vietnam, Ong revealed they are now looking to enter Cambodia either by the end of this year or by 2021. In Myanmar, they are actively looking for partners whilst opting to be “more thoughtful” in reentering the Philippines after exiting there years ago.

Looking ahead, he remains confident that their perspective on growth will be coupled by their core chicken menu, which he expects to be resilient as well despite a more difficult business climate.

“The fried chicken business has shown itself to be very resilient in these times. However, having said that, I think the business model is definitely going to be tested,” he said, referring to higher commission fees being paid due to delivery.

“Not every product is equally suitable to be delivered. But I think fried chicken is a great product for delivery. French fries isn't fine, but people love to have fries and fried chicken. The pizza guys, the wing guys - they have figured it out. The fried chicken guys haven't really. So that's something I think we need to push ourselves a lot more on.” ###

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