Global Franchise Architects

Spotlight

Global Franchise Architects
Multifaceted Fast-Food Man
From FoodPacific - Thursday, January 12, 2006
 



Multifaceted Fast-Food Man. It takes a rare man to have success in food retailing, without having the sort of background that normally would be required to run an international fast-food chain. Born into a family who for generations has dealt with fine gemstones, Fred Mouawad (Ma-wahd) with his unerring eye for beauty and value, is the exception. Just over a decade ago, after being told by a consulting firm that pizza would never be a staple food in South India, Mouawad "literally tossed the report in the bin." In India today, pizza is synonymous to the home-grown Pizza Corner, and in Thailand, the caf?environment of Coffee World preceded the entry of bigger coffee chains.

IT TAKES a rare man to have success in food retailing, without having the sort of background that normally would be required to run an international fast-food chain. Born into a family who for generations has dealt with fine gemstones, Fred Mouawad (Ma-wahd) with his unerring eye for beauty and value, is the exception. Just over a decade ago, after being told by a consulting firm that pizza would never be a staple food in South India, Mouawad "literally tossed the report in the bin." In India today, pizza is synonymous to the home-grown Pizza Corner, and in Thailand, the caf?environment of Coffee World preceded the entry of bigger coffee chains.

Mouawad is CEO and chairman of Bangkok-based GFA Corporation, whose portfolio also includes The Cream & Fudge Factory, New York Deli, The Donut Baker, and Golden Pretzel. GFA (Global Franchise Architects) has 171 stores worldwide, and more stores are planned in Indonesia and Hainan, China, over the next three years. FoodPacific.com spoke to this multifaceted man who admits being totally involved in every detail of running his operation (staff call him "Diamond Eye").

FoodPacific: It's quite clear why you started your food retailing venture in India, but why pizza? Why not fried chicken or even a shawarma chain?

Fred Mouawad: I started with Pizza because it is a universal category that has done well in virtually every market. In the US it is by far the largest category; pizzas outsell burgers five to one. I knew Indian consumers liked all the different pizza ingredients without being accustomed to the product as a whole. They love breads such as Naans and Rotis, like cheese, vegetables, and meats for the non-vegetarians, so why would they not like them all in one? From a conceptual standpoint the risks appeared to be minimal at the time, although when I hired a consulting firm at the request of a local partner that wanted to join in the venture I was told pizza is not a food staple in the South and I should therefore not launch the product. I literally tossed the report in the bin when I got it. 10 years later, and I still see similar reactions when I talk to locals about bringing in new product categories in the country. I am just amazed at the inability of most people to have a vision of the future. 

 

FoodPacific: As an unknown 10 years ago in Chennai, how did Pizza Corner pitch itself to consumers? What are some of the marketing tactics that you may have evolved that are now being followed by your competitors?

Fred Mouawad: At the time we were the first international pizza chain to enter Chennai, and our focus from day one was to provide a great customer experience. In the initial days pizza was a very innovative product, so we focused on offering the original American pizza. A few years later we started experimenting successfully with localizing the product, and later we were copied by others. Over the years we have continued to innovate and our competitors have not been able to directly emulate our efforts. Zzapi the super hero figure representing Pizza Corner is an example of how we differentiated ourselves by appealing to children and families in particular. Our latest innovation with Conizza (pizza in a cone) and its nationwide TV campaign have been a great success. I am confident over the years we will keep on differentiating ourselves through innovation. That goal is actually reflected in our newly launched slogan which is "Better Pizza through Quality and Innovation."

FoodPacific: Back to 1996...Where in the world does one buy lamb pepperoni in India? How and who developed this product for GFA?

Fred Mouawad: In India we chose to first open in Chennai as at the time there were no international pizza chains operating in the city. Given we had to build a brand that would appeal to local consumers, we had to adapt to local habits and preferences. Chennai having a large population of Muslims and of course Hindus we had to exclude both pork and beef and that is how we came up with lamb pepperoni. It is a good example of how at GFA we study local consumer preferences, and adapt to local tastes to offer a great customer experience.

FoodPacific: How did you build up your supply network? How difficult has it been to source Halal products?

Fred Mouawad: It was not that difficult to source Halal products as there is a large Muslim community in Chennai. On the supply chain front we had to set-up our own commissary (central kitchen) from day one. We have always produced our own dough, and cut all our vegetables at our own commissary. Although getting supplies has become easier now in India, we still operate our own Commissaries in all the major cities we are in. We view this as a competitive advantage as we control the quality of our supplies at all times.

FoodPacific: Kids in India love ZZapi Nercor. Where did this genius idea come from, and do you expect it to Thai kids and elsewhere?

Fred Mouawad: Zzapi Nercor was conceived in order to appeal to children. Given we had so many families visiting our outlets, it was a way to connect to children. We are now taking Zzapi to the next level, and building him into a Super Hero that will set a great example for children to follow. The fundamental idea of launching a figure that represents the brand is hardly innovative, but at GFA we try to take the execution to a higher level. We in essence look out in the market, pick some ideas, plan on how to conceptually enhance the idea, and then focus on a high quality execution.

 

FoodPacific: Why Bangkok for the first Coffee World, and not New Delhi?

Fred Mouawad: Coffee World started in Thailand one year after launching Pizza Corner in 1996. It was just an opportunity that presented itself. At the time I started my venture capital business, and I had one colleague at the office that was very passionate about coffee. She had done her undergraduate studies at UC Berkley, and her MBA at UCLA. She was very fond of the memories she had spending time with other students at local coffee shops, and we both knew that the coffee category would emerge in Thailand so we wanted to do gain first mover advantages as we did in India by launching Pizza Corner.

FoodPacific: Are there more similarities or more differences among consumers where GFA operates?

Fred Mouawad: I would say there are far more similarities than differences, but the differences cannot be ignored. They have to be identified, and catered to in order to offer a great customer experience. They key here is satisfying customers by offering a great product, store environment, and service at good value. Customers worldwide always appreciate and recognize a quality experience, and they look for the same parameters and that is the biggest similarity. The adaptation to differences is mostly around the product. Whenever appropriate we localize the product in order to appeal to local consumers.

FoodPacific: What marketing policy would work in Thailand but not in India?

Fred Mouawad: That is a difficult question because we look at marketing from a local point of view, so when we conceive a promotion we focus on local customer preferences and the historical performance in the market. Having said that, some marketing initiatives do respond better in some markets compared to others. In India for example consumers are more price sensitive, and respond better to low price promotions. Comparatively in Thailand consumers are less price-sensitive and they value promotions providing more for the same price. As a specific example in Thailand Coffee World does very well selling its 22 oz cold beverages, the largest of three sizes on offer, and when we offer an upsize on a new beverage introduction is works well. In India the highest seller is the 12 oz drink, and we have sold very few 22 oz drinks. Indian consumers are not used to up-sizing yet, as they are not willing to spend more to get a larger quantity.

FoodPacific: You have great looking stores, with an almost fine-dining environment for fast-food and convenience. How are the store premises and interiors developed, and how big a hand do you have in them? How about your logos?

Fred Mouawad: I am personally involved in every single component of our store designs and promotional materials. Every design and promotion has so far been reviewed by me internally. I do this to set a standard that can then later be replicated with consistency. We are fortunate to have a great team of 12 in-house designers, and I work closely with them to set the tone for each brand. Internally we work very systematically following detailed processes based on our quality management system which is 9001-2000 certified. For the design of each brand we first define the standard store specifications for each format of the brand (kiosk to large dine-ins) such as the material boards, the furniture, the counters, the equipment, the menu, the branded look and feel components such as the wall paper and any decorative items. Once we define all the specifications we build a prototype in our corporate building, and then review the details of the prototype until we literally no longer can identify any flaws. As my background is in high-end jewelry and very fine gemstones, I tend to pay a lot of importance to the esthetic environment of any retail store.

Each brand is first conceived with me trying to find a name. In the process of finding a name I make sure the URL is available. Once I feel right about the name, I usually have a feel for how the logo should look like so I provide a brief to our very talented team of graphic designers. I review several variations of the logo until I feel we have it right, and can no longer improve upon it. The name and the logo are essential foundations to start the cycle of creating a brand. It is the embryo that sets the tone for the development of all the rest. The logo allows all of us to see the brand alive. It provides a tangible vision to a process that is still to be created.

FoodPacific: You've said that it's become harder and harder to find a good location at a fair rental price in Thailand. Is the same true in India? Has this influenced your decision to expand your operations in other countries?

Fred Mouawad:  In India it is also difficult to find good locations, but the market is growing and there are over 500 shopping malls being constructed around the country. The market is still in its growth stages, and we expect that growth to be in the double digits over the next 10 years. In the last two years Thailand has reached a point of saturation in the food and beverage sector with far more supply of outlets on the market compared to the growth in consumer demand, and that is primarily because too many shopping malls have recently opened. Having said that, we do recognize that every market is in different stages of its maturity cycle. In Bangladesh for example there is a very limited supply of international food and beverage operators, and a heavy pent-up consumer demand. Our franchise partner in Dhaka has opened six outlets in the first year with Coffee World and Pizza Corner and the results have been very positive. The brands have been received very strongly in the market.

FoodPacific: Do you think there will be any differentiation from the GFA norm in the way your franchisee will operate in China?

Fred Mouawad: Absolutely not! Our norms are all about continuously improving the customer experience at any of our stores no matter where the stores are located. The basic operating standard does not change for any country. Our systems are devised in order to consider local preferences and requirements by keeping our operating standards at the same level. We in essence use one operating system to manage multiple brands in multiple countries.

FoodPacific: As operations get bigger, there is an ever greater need for quality control. Can a customer who eats at Pizza Corner in Pune get the same Pepperoni Supreme flavor in Phuket?

Fred Mouawad: Maintaining our quality standard at any of our stores is at the fore front of our minds when building our systems and monitoring our stores. The quality control starts at the store itself. If the staff is well trained, and if they follow the GFA standards they will deliver a consistent quality experience. Our goal is thus to make sure every store delivers on that standard, and to assure compliance we focus on training, requiring our partners to conduct their own internal audits, and we also conduct our own audits in order to assure compliance. Given the Pizza Corner menu is Pune is going to be different from the one in Phuket, we would like to assure every customers that they will get a quality experience and not necessarily the same menu in each country.

FoodPacific: Do you have or plan to have a training center such as McDonald's Hamburger University?

Fred Mouawad: We already have a GFA Academy where we do all the training for our corporate and franchised team members. Our two Academies are now located in Thailand and in India. We also develop our own courses internally, and offer local assistance to Franchise Partners by sending some of our team members to local markets to conduct extensive on site training. We have taken training to the next level by developing very user friendly training videos that can be conducted at the store level with the use of a laptop. At GFA we are fully aware that the strength of our "continuous support" is what maximizes the chances of our partners succeeding, and only when our partners do succeed we do.

FoodPacific: You have a presence in the new Thai airport, which is really a great hub for travelers. How do you think this will contribute to building awareness about your brands?

Fred Mouawad:  We are very excited about our presence at the Suvarnabhumi Airport in Bangkok. We have two prime locations on both ends of the departure area, and both are combination stores featuring Coffee World, New York Deli, and The Cream & Fudge Factory. Our combination stores have been very well received by customers as they provide a mini food court experience offering more choices throughout the day. In the example of the airport we offer coffee, fresh made to order sandwiches, and super premium ice-cream all in the same store with each expert brand offering the product. The stores cater to a truly worldwide audience, providing further evidence our brands have a universal appeal. [They] also expose our brands to consumers and potential franchise partners worldwide positioning our brands for their continued global expansion.

FoodPacific: What factors are considered when opening a new food concept? How long does it take from conception to actual fruition?

Fred Mouawad: We have built incredible capabilities in-house including our own interior design team, a construction company, research and development team, graphics team, quality management system, and our own academy to write all the training materials. Depending on the complexity of the concept we want to develop and on internal priorities it can take us anywhere from 3 to 8 months to develop a new concept. The brands we have so far built are all in the QSR (Quick Service Restaurant) category. We like to build brands in categories that are either proven in other markets or have the potential to weather short term fads, concepts that have the potential for multiple sites in an area, and brands that have a broad appeal offering value to consumers.

FoodPacific: As a Lebanese-born Frenchman who is now a naturalized Thai with business interests in India and the United States, etc., where do you really feel most at home?

Fred Mouawad: Both of my parents are of Lebanese descent and they later became naturalized French. I was actually born in Saudi Arabia, grew up in a boarding school in Switzerland, did my studies in the USA, and have always traveled the world since a very young age with my parents on leisure and business trips. Although I have been based out of Thailand for most years since 1991, I do not hold the Thai Citizenship. I consider myself a true Global Citizen. I don't have deep roots to any given territory or culture, so I try to naturally adapt and appreciate the beautiful side each country and culture has to offer. I do think, however, that this view of the world is what has naturally led me to building businesses that could transcend their borders. Building a business that can travel the world and touch people from all walks of life truly inspires me.

FoodPacific: What is a normal day like for you?

Fred Mouawad: If and when asked at the end of day "how was your day?" My answer is very consistent. "I had a rough day." When you are at the top as the founder and owner of diverse businesses, you learn how to deal with daily challenges. As a matter of fact if your management systems are solid, the big challenges should always surface to the top, and the smaller ones are typically handled by managers within the organization. I work around 14 to 15 hours a day. I exercise at least three times a week in the morning, and say goodbye to my children before they leave to school in the morning and have dinner with them home whenever I can throughout the week. My days are planned as much as possible ahead of time to maximize productivity. I do request for all meetings to be pre-scheduled with a clear agenda so I can spend quality time in them without interruptions. I divide my work in four different types. Listing them by order with the ones I spend most time on they are 1) screen to screen through email with all my direct reports mostly in the morning and every night after dinner until midnight, 2) face to face meetings with managers, suppliers, or partners as a group or individually throughout the day, 3) doing personal audits on different departments and visiting stores including on week-ends, and 4) on phone calls to supplement email communications with overseas offices or partners.

FoodPacific: What is an ideal 24-hour break for you?

Fred Mouawad:  The best break is getting my mind off work by being involved in an outdoor activity such as snow skiing, riding a motorcycle, or doing water sports. My mind is very active, so unless I am focused on an activity I am always thinking about business by reflecting on the past, assessing the present, and planning for the future. I also like reading a lot on a variety of subjects with of course a heavy emphasis on business, and although relaxing I am always trying to get insights to better understand myself and improve my businesses. I also like to spend time grappling with the larger issues of life such as why is the world the way it is and how it all works from an organizational and behavioral perspective.

Pizza, coffee, deli, ice cream novelties, and now doughnuts and pretzels. Is there another GFA food concept in the works?

Fred Mouawad: Building brands besides operating and franchising them is a very important part of what we do at GFA. Until we launch the brands we, however, do not provide any specifics. This year we are looking at launching one concept in the casual dine-in. This would be the first time we venture outside the QSR segment. We would like to build a complete portfolio in the food service industry covering several segments.

« Back to main page



Global Franchise Architects Brands
Find out more

Copyright © 2006-2009 Global Franchise Architects Co.,Ltd. All rights reserved. Designed & Developed by Itorama Consulting.

If this page does not show properly, you need to install or update your Flash Player. Click here to download Flash Player.