Last week, I posted an article about hot pot dining. What it is, its history, why it is so popular, and some other interesting facts. You can read that article [HERE]
Now, let’s look at it from an investment side. The F&B (Food and beverage) industry, restaurants in particular have always been the most popular franchising industry. Bringing an international brand to your local market can work very well. These concepts can introduce new foods, new styles, and unique elements that liven up and excite the local restaurant scene and when done right can be very profitable. Not all food franchises are suitable for Asia though, particularly in ASEAN or SE Asia. Very famous F&B brands worldwide sometimes have trouble achieving traction here in our region. However, Asian concepts like Thai and Cantonese are well liked and consistently do well here. Social or group foods also do particularly well as most people in Asia like eating with family, friends, or colleagues.
There are many types of restaurants, from QSR (Quick service restaurants – think McDonald’s or Starbucks) to exclusive fine dining restaurants that cost hundreds of dollars for 1 meal. However, the largest and most popular segment is casual dining. These concepts typically involve ordering and paying at your table, a service staff to bring you your food, and have good value for money. Most will offer take-away and delivery options for additional revenue and convenience. Despite an increase in delivery during Covid-19 related lockdowns, experts don’t expect any long term reduction in dine-in restaurant business. This relates to the actual reasons people dine out. 90% of people enjoy going out for a meal at a restaurant, 75% prefer it to cooking at home, and 40% view restaurants as part of their weekly lifestyle. In many countries worldwide people spend 6-10% of their total budget on restaurants. QSR and fast casual restaurants simply don’t fulfil people’s wants and needs like casual dining restaurants.
Trying new things, tasting international foods, and seeing trendy decors are all things most people enjoy. We go to relax, enjoy a variety of ambiances, spend quality time with family and friends, and as a big part of our weekly “entertainment”. All with the added benefit of not having to cook and clean up at home. We also go to experience new cultures and food and casual restaurants are far more suitable for this type of experience than fast food restaurants.
When we look at the wants and needs of consumers as they choose which restaurant they will go to it is quite clear that social dining concepts like hot pot are popular. They make lifestyle dining easier, as people enjoy cooking and eating together while sharing food. In today’s world of isolation with everyone on their phones and tablets, a meal that requires activity can do much to foster better relationships among friends, families, and co-workers.
Every investment has risks. The reason great restaurant brands franchise is so they can share their knowledge and experience, their trial and error, their special intellectual property with you. This increases your chance of success and significantly reduces your time, effort, and investment of launching something on your own. When a great brand partners up with a good local partner, F&B brands can be very successful, often hitting a consistent 2-3 year ROI.
Hot pot is one of those things that people liked 1000 years ago, and will likely like a 1000 years from now. It is not some short-term trend that might disappear tomorrow. That history, the fact that it fills the needs and wants of diners much better than normal casual dining restaurants also can make it more successful in your city.
Every brand is different. One of the most important things you have to realize is that franchising is about scale. One single restaurant is never the goal. It is a significant investment for both the franchisor and the franchisee to open that first restaurant and launch a brand like COCA in a new market. When you factor your office team and other HQ costs, as well as the time and effort it takes, one restaurant often is not worth it. It is when you open the 2nd, 3rd, and so on that you build up a brand name in your local market and start to scale up your profitability.
Due to this, a restaurant franchise is not simply the $200k-$700k investment for a single unit. Normally, you should be setting aside enough funds to build the first 2-3 locations, cover the franchise fees, and other brand startup costs. The least expensive international brand requires around $500k USD, and they can range from $4-5 million for some.
At VF Franchise Consulting, we are happy to be partnered with the same company that brought hot pot to Thailand way back in 1957, COCA. Of course, some markets are no longer available as they have franchisees already around the world, but if your local city does not yet have any COCA hot pot restaurants than please note the information below.
The core of COCA:
To be an innovative and leading chain of international restaurants serving quality Cantonese and Thai cuisine in a warm ambiance with excellent customer service. “Delivery what we promise” by delivering quality authentic cuisine that uses only the best ingredients, appealing presentations, all in a modern décor to exceed customer expectations.
From Thailand to Singapore, Japan, Vietnam, Malaysia, Indonesia COCA has provided customers with the best Cantonese Hot Pot (Sabu sabu, Suki, Steamboat) for more than 63 years. Their menu includes such favorites as Hong Kong roasted pigeon, Chinese drunken chicken, COCA pork belly, Crab curry, and of course their world famous Suki hot pot. Even after 63 years no competitor has ever been able to match their amazing Tom Yum soup broth or their trademarked Suki dipping sauce.
Or a full webinar about COCA, Mango Tree, Mango Chili, and Yenly Yours brands here:
Cantonese and Thai food continue to be extremely popular all around Asia, the Middle East, and the Asia Pacific region. Trevor and his experienced team are always looking for great new partners around the world to help them expand further. You may read more about COCA at the link below. If you are interested to discuss bringing this amazing hot pot brand to your local territory, please CONTACT US at [email protected]
There are many QSR, Fast casual, and premium restaurant brands that are actively seeking expansion in Asia. To see some available in your country, check out our website:
Robert Beausoleil is a franchise broker and has been visiting Asia for 25 years, and has lived in Vietnam for more than 12 years. He works as the Director of Business Development and Franchise Operations for VF Franchise Consulting. He has extensive experience in franchising, both for franchisors and franchisees. You may contact him at [email protected] or on LinkedIn @ linkedin.com/in/robert-beausoleil-6a0027b1