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Mr Biggs, a Success Story, Says MDAug 16, 2011 (The Moment/All Africa Global Media via COMTEX) -- After 25 years of delighting consumers with quality delicacies in Nigeria, Mr Bigg's, a quick service restaurant, has emerged the leading brand in the food industry. Divisional Managing Director of UAC Restaurants, Derrick Van Houten, in this interview with Jonathan Olajide, tells the success story and challenges facing the brand. WHEN on August 12, 1986, the conception of establishing a fast food restaurant in Nigeria struck the minds of some people, little did the promoters know that their idea would later turn out to become a leading eatery in the West African sub-region. And after 25 years of existence, there is, perhaps, no part of Nigeria that Mr Bigg's is not known. The pomp that greeted the 25th anniversary of Mr Bigg's last Thursday really described the success story of the brand, which in the estimation of analysts, has emerged leader in the Nigerian fast food industry. Owned by UAC Restaurants, a unit of UAC of Nigeria Plc, Mr Bigg's currently operates in over 170 locations in 52 cities in 29 states. Today, quite a number of consumers of Mr Bigg's' delicacies may not know that the eatery started out as a coffee shop at Marina, Lagos Island 25 years ago. Delighted at the impressive performance of the brand, Divisional Managing Director of UAC Restaurants, Derrick Van Houten, explained that consistency in quality of offerings and compliance with best standards have helped the eatery to outperform competitors in the industry. Houten said: 'Mr Bigg's is an icon as a brand, not only in the food industry but also in Nigeria. In terms of performance as a brand, I think it has done very well. It has outperformed all the oppositions, against our brands, and we are happy with the performance. There are a lot of things we do in Mr Bigg's that make us unique. There is a structure that has been in place to ensure that we remain a leader and that our consumers are always satisfied with us. The fact is that Mr Bigg's has always offered quality food at a good price, and we have maintained this over the years. This has been one of the success formulas for the group. 'Some of those things we do include the improvement of the quality of our food all the time, compliance with best standards has continuously been raised to make sure that we operate at the level of international benchmark. Improvement is an on-going thing for us, because if we don't do it, we will not be the leader. We are happy that the backbone of the business is good and solid so far.' But the franchisee model adopted by UAC Restaurants in running Mr Bigg's is what brings joy to Houten most. Every outlet of the eatery across the country and in other countries in the West Africa sub-region is run under the partnership of an investor and the company. The Dutch noted that the franchisee model has helped the expansion of outlets while many more are still trooping in across the African region. In all of the prosperities and ground-breaking feats achieved by Mr Bigg's, the DMD could not help revealing his gladness in the impacts made in Nigerian markets. 'We have made much more impacts in Nigeria than in any other countries in West Africa. We are still very small in Ghana. Nigeria is by far our largest market. We will continue to concentrate on expanding our presence in Nigeria through franchisee model. We want to grow the number of our shops up to three times of what we have now before we evolve plans to grow in other countries. At the moment, we are in 52 cities in 29 states, and I think that is a good coverage for any business', he stressed. There are a lot of processes that an investor must go through to bag a licence to operate under the big brand. The procedures require a person to choose a location in an area where there are heavy urban and commercial activities. The financial cost, according to the Dutch, is the very last thing because the process is quite a complex model that cannot get any naira value. So, location is the major criteria to getting the franchise. 'If an investor wants Mr Bigg's franchise, we will first make sure he is the right person as a franchisee who can guarantee a good business partnership between UAC restaurants and him. Location is very critical, once an investor has his location correct, we will then look at the financial side. What is the total cost of setting up? Do you have the property? It is quite a complicated process to set up a franchisee; it is not just you bringing your chicken.' As an industry that is full of stiff competition, which gets worse due to the entrance of new names on a daily basis, Mr Bigg's has had no game plan other than to leverage on the benefits presented by competition. While commenting on opposition, Houten said competitors use the Mr Bigg's' template to operate, but that they have not been able to meet up with the brand. He agreed that competition is good for business because it brings out the best quality service from investors. 'Competition is good for the industry because it raises standard and makes people to look at the way they are doing things from where we started from. We don't mind opposition as a market leader. We have found that a lot of oppositions are using the ideas that we used in the past. The challenge for us is to be creative as a restaurant group and to make sure that we lead the pack so that others continue to follow.' While many patronisers and investment analysts believe that Mr Bigg's should be listed on the Nigerian Stock Exchange given its market size and investments it has made over the years, Houten's position is close to that. He defied expectations, saying that there are no plans to list the cafeteria on the nation's stock market in order to raise capital. He said the cafeteria remains a unit, and would continue to remain a unit of the restaurants group. According to him, 'UAC Restaurants is a division of UAC of Nigeria Plc. The latter is listed on the stock exchange, so as a division we do not dictate stock exchange ideas or listing. This has been the decision so far, and as we are at present with the renovation of UAC Plc, there are no immediate plans to make Mr Bigg's a separate company.' When asked why some franchisees closed shops, he said it was due to poor location and funding. 'First, if those businesses were in wrong locations or poorly funded by the franchisees, they could possibly fail. Mr Bigg's is just a brand run under franchise, so we cannot control everything in another person's business. What we control are raw materials, quality, recipes and menus. 'There are many roles that a franchisee needs to play. You cannot just open restaurants in any area just because you want to be there. The business is all about location, so you have to pick areas where you have fit, where spending power is high and where there is a mixture of urban and commercial activities. It is very difficult to put Mr Bigg's on the street in a small village; it will not work, it will close down.' Without small and medium enterprises (SMEs), Mr Bigg's would not have been a success story. It uses SMEs as partners in sourcing 98 per cent of raw materials. The partnership with small business, he said, has resulted in cost reduction and promotion of local businesses. He added that the rapport has also created employment and business opportunities for Nigerians. However, Houten concedes that the performance of Mr Bigg's has not been without the problems arising from the operating environment. Top on the list of problems facing the company is human capital flight from Mr Bigg's to competitors, power out- ages, harsh operating environment, lack of credit and unfriendly regulations. 'Mr Bigg's has invested so much in many people through employing and training them. But the sad story is that opposition takes them after we have trained them to be the best. So, we are always faced with problem of looking for new people. Government regulations are not easy; it makes Nigeria to be an uneasy market to enter. There are a lot of regulations that are unusual to our business. 'Power is a big problem too as everyone knows. The situation of power outages is not getting better, it has become very expensive to operate in terms of power. Finance from banks has also become very difficult. It is unfortunate that a franchisee, looking for money through bank loan to put into his business, cannot get any. 'Cost is high. We spend a lot on diesel to generate power. There is also the issue of cost of raw materials and sometimes the quality of raw materials is not consistent. We can buy tomatoes in February, and in July the quality of the same tomatoes would have changed. This affects our pricing and cost. Also, the pricing structure in Nigeria is not totally market-related. There are stronger vectors in some of the supplies that manipulate pricing', the Dutch said. But he said the company copes with the challenges by being more efficient in its processes, application of technology and changing game plan all the time to minimise costs. |