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Franchising – SugarBun Restaurant

“Be Your Own Boss”

SB Quick SR

SugarBun offers both variety and value, besides the traditional QSR features of quality, service and cleanliness. Its hero product is Broasted Chicken; famous for being juicer, tender and less oily-unlike the typical “fried chicken”. Other distinctive and unique products (relative to other popular fast foods) include savoury rice, hot saucy kano, fish and chips, and fresh pickled vegetables. Other products it offers include chicken/beef/fish burgers and hot and spicy chicken, mash potato, french fries and coleslaw. The new “4-in-1” Concept Quick Service Restaurant will also incorporate Asian Cuisines, Patisseries and Café Bar Beverages in her menu.

Through its aggressive marketing and promotions campaign, in quarter 4, 2001, SugarBun experienced its greatest increase in sales and market share. In East Malaysia, SugarBun competes neck to neck with KFC for number one position, while McDonald’s remains a distant third.

In the midst of aggressive expansion plans, SugarBun has not forgotten its corporate responsibility towards the community and the environment. It has been involved in various community projects, including setting-up collection boxes for various funds and charitable organisations.

Franchise Business

SugarBun has so far established 44 franchise stores successfully in Malaysia, five in Brunei Darussalam, one in Chittagong Bangladesh and one in Yin Kou, Liaoning, China.

The new "4-in-1" Concept or QSR and Destination Centres has been instrumental in ensuring unique differentiation for the SugarBun brand. Its strength lies in its potential in catering to the needs of children, families, teens and young working adults.

The main future concentration of franchising will be in building more of this 4-in-1 concepts stores, which has been proven to outdo other QSR chains in the vicinity. This will ensure competitiveness against other QSR chains should they be located nearby.

STRATEGIC DEVELOPMENT & ACHIEVEMENT

Quick learners were the people behind SugarBun. In the mid-80's recession, they encountered a bitter experience when two super-markets chains collapsed affecting their restaurants in Sibu and Kuching. In Sibu, they were forced to relocate or buy up the four shophouses pegged at RM3 million. They decided to relocate - a move which turned profitable in later years. The other restaurants, unfortunately (set up within a supermarket), had to be closed at a substantial loss. Nevertheless, over the years SugarBun has achieved many "first". They were the:-

*First Malaysian homegrown fast food restaurant to expand internationally;

*First Malaysian homegrown fast food restaurant to achieve the MS ISO 9002 certification-the highest possible industry operating standards;

*First Malaysian fast food franchisor to be listed on the KLSE;

*First Malaysian fast food chain to incorporate a Junior Library into its major restaurants, thus providing "edutainment" and additional service to the community;

*Only fast food chain in Malaysia to have a 100% local work force, a plus point for SugarBun as they face less cultural and language problems in the frontlines with customers.

Other key factors that led to their successful listing are:-

*Strong R&D support in their continuous programme to sustain sales and margins;

*Competitive, affordable and value-for-money pricing:

*Positive financial growth over the years;

*Strong management team;

*Participation, contribution and dedication from shareholders;

*Tremendous growth opportunities in the SugarBun franchise system.

The listing has brought on many benefits for SugarBun. Among them are open doors for upstream and downstream synergistic activities, mergers and acquisitions. Then, there is the ability to tap into the capital market for cheaper funds which will assist in the growth of SugarBun.

A better image has surfaced as well which has provided for better locations, recruitment of better manpower and better sales because of a higher awareness level.

(Malaysian Enterprise Journal '98 extract)

Winning Opportunity

As a SugarBun franchise owner, you’ll have the best of two worlds - a proven system plus the security that only franchising offers. The US Department of Commerce and International Franchise Association stated that since 1979, less than 5 percent of franchised stores fail. This is remarkable given the five-year failure rate for independent small businesses is over 80 percent.Why does success favor franchising?

Consider the advantage you get as a SugarBun franchise owner :-

Owners Make Best Operators

Nothing guarantees success more than the owner who is personally committed to and active in the restaurant business.

A Tested & Highly Profitable Menu-and-Operational System

Our system has evolved through the development and operation of SugarBun Company-owned and franchised restaurants.

A Recognizable Brand Name Which you can develop

Your customers will learn to know SugarBun and recognize our distinctive trademark and signage.

Research & Development

Our R&D team leads SugarBun’s on-going development of new products to keep our restaurants ahead of everyone else in the industry.

Training Beyond the Basics

Our training programme is geared to help you excel in both your operational and management skills. We provide an extensive hands-on training programme in all areas of store ownership and management.

Marketing

A variety of media is used to advertise the business. The Marketing Department will assist you with on-going stream of creative and successful advertising and cost-effective marketing programs including new product introductions, promotions and point-of-sale materials.

However, we continue to recognise the best advertisement is word of mouth. The most successful franchisees devote time every day promoting in their restaurant through local community efforts and positive customer relations.

Save On Supplies

You can enjoy cost savings on supplies and equipment because of mass buying power of the franchise system.

Site-location & Development Assistance

SugarBun’s real estate support will help provide you with expert guidance in these decision processes. Our goal is to ensure that your restaurant opens on time and with minimum problems.

Choosing The Right Location

Choosing The Right Location For Your SugarBun FranchiseHow SugarBun Real Estate Supports You:

Step One: Market Availability

At SugarBun, we help you to confirm the geographical preference as to the specific market where you would like to operate your restaurant(s). We will confirm if the market is available for development or we suggest other areas open for development.

A prime consideration will be your personal growth intentions as you look to build several restaurants in a market where you can dominate. All territories and terms of development, however, are awarded at the sole discretion of SugarBun.

Step Two: Sign the Preliminary Agreement

Once you have selected your market, you’ll enter a Preliminary Agreement with SugarBun for that market. At that time, the next step will be to determine the trading area.

Step Three: Trading Area

SugarBun can help you focus on the right trading area(s) in the market in which to build your restaurant.

Step Four: Site Selection

Selecting a good trading area is extremely important; even more important is the decision on the specific site location within the trading area.

Step Five: Location Acceptance Request [LAR]

Once you have made a final site decision, you’ll be asked to complete a formal Location Acceptance Request [LAR]. This form is forwarded to SugarBun GM (Franchise Development) for review and written acceptance.

At this point, SugarBun’s Project Department enters the picture to help you determine the exact restaurant design to be erected on the site.

Site Selection & Architecture Planning

Site Selection & Architecture Planning Designed For Efficiency

How SugarBun’s Construction Experts Support You?

We provide you Construction Planning support in such areas with as:-

Feasibility Study

SugarBun can provide you with a detailed questionnaire to help conduct your feasibility study, as well as other studies that may be required.

Preliminary Site Study

Your construction specialist will also work with you to suggest the size of the restaurant as well as seating capacity.

Site Visit

Depending upon particular needs, a site visit can be made to help you identify specific issues with the site and suggest steps to facilitate the construction process.

Final Site Plan

We will help you define the project scope and provide a recommended bid package that will go to the general contractor.

Marketing Support

Marketing Support To Build Your BusinessHow Marketing Supports You?

At SugarBun, we provide market research and input on new products development and testing. We strive to continuously improve on customer communications, product quality and customer service. We also continuously offer products which suit the taste of specific customer segments.

Advertising

We strive to deliver cost effective ways to generate brand awareness. Some of the media we used in the past include TV, Radio and Print Advertising, leaflets, and painted buses.

For the store itself, effective communication is achieved through attractive designs for lighted signages, menu and menu boards, posters and packaging. We have our own Creative Department to generate effective and creative advertising, as well as providing “below-the-line” support for Local Store Marketing (LSM) efforts initiated by individual stores, e.g. banners, posters, coupons.

Promotions

For the opening of new restaurants Corporate Marketing provides assistance in creating a launch plan tailored to suit the particular market situation. Corporate-wide promotions are conceptualised for implementation on a regular basis throughout the year to provide customers with added-value, and to increase trial or repeat customers.

Promotional support materials for the store, e.g. banners, posters, danglers, premiums, are charged to the Franchise, with minimal mark-up to cover administrative expenses.

On-going Support

The Marketing Team is readily accessible to the Franchisee for consultation and advice on how to plan and implement effective Local Store Marketing activities.

Operation Support For Excellent QSCV

Operation Support For Excellent QSCVHow SugarBun’s Operations Support You?

At SugarBun, we believe in delivering excellent quality, service, cleanliness and value through our proven systems, procedures and techniques, and to periodically evaluate the franchise units to ensure that levels of excellence are maintained. We will guide you through all these to jointly achieve only “Excellence

OPENING STAGE

Pre-Opening: To give a franchisee the first insight and familiarisation of SugarBun’s Operations, we shall train 4 personnel from the franchisee (2 Managers & 2 Supervisors). This training will give you the confidence and familiarity to carry out your responsibilities. However, we are flexible on the number of personnel trainned based on the size of the restaurant(s).

Post-Opening: SugarBun is committed to ensuring everything runs smoothly for the franchisee during the initial stage. Thus, a SugarBun representative will remain in the restaurant during the first week of business assisting the management team in daily operations.

Continued Support: Our support for franchisee does not end after the post opening. We believe in building continuous good rapport with our franchisee. Regular restaurant visits will be scheduled to review procedures, cleanliness, service, product quality and attitude of management and staff.

Continued Training: We believe nothing guarantees success more than thorough training. We also believe that the most effective training combines actual on-the-job work experience with classroom instruction in all aspects of managing and controlling the business. Each SugarBun franchisee will continuously undergo training at our Training Academy or our Operations Manager will schedule in-restaurant sessions to train management team or staff.

Other Operations Support

Purchasing Effectiveness: Although Purchasing is managed through a separate area of responsibility, it still works “hand in glove” with SugarBun’s Operations and Marketing Departments to maintain low pricing on food, supplies and distribution services.

As a member of an established international network, you’ll be able to realize cost savings that are a direct result of the mass buying power of the franchise systems. Your Corporate Buyer will work closely with you regarding your unique situation and circumstances.

Excellent Service & Management Training Programmes

“Excellent Service & Management”Training Programmes To Support You

How Training Supports You?

Training Programmes

At SugarBun, we believe in delivering quality, service, cleanliness and value. We help you understand every aspect of the business: from day to day operations and accounting, to inventory and managing your staff. We offer you guidance through every aspect of your business, including continuing support programmes that update you on new techniques and equipment. We’ve heard our training is tiring and stressful, but we’ve also heard that those who have attended our training benefited more than just an ordinary asset. Our Training Academy and our Corporate Trainers are well equipped and prepared to train and test you to ensure that you understand the business and its operation better.

Training for Franchisee Principal

We equip Franchisee Principals with a two weeks’ long programmes on operations of SugarBun restaurant. We will help you understand aspects ranging from how a chicken is broasted to how a management meeting is conducted. Upon completion of the programme, we also help you understand the insight into how a restaurant is supported by our committed team from the Home Office, QSC Auditing and technical support.

Management Training

The franchisee management team which will be running the restaurant shall undergo the Management Training for a period of three to six months. During the training, the team members shall be taught the daily operation of a restaurant and the management aspect of the running of the restaurant. Our goal is to ensure that the management team emerge from the training with sufficient knowledge, skill and experience to manage and run a SugarBun Restaurant in accordance with standard practices.

TRAINING PROGRAMMES FOR FRANCHISEE

FRANCHISEE PRINCIPAL - 2 WEEKS

*SugarBun Operation Structure

*Restaurant Standard Operating Procedures

*Shift Running & Counter Management

*QSC Management

*Operation Management

*Profit Operating Statement

*Marketing

*Training System

*Engineering & Equipment

*SugarBun Franchising Structure

FRANCHISE MANAGERS 3 MONTHS TO 6 MONTHS

*SugarBun Operation Structure

*Restaurant Standard Operating Procedures

*Shift Running & Counter Management

*Quality Management

*Administration

*Personnel (Recruitment, training, review, promotion, terminiation)

*Profit Operating Statement

*Training System

*Equipment Maintenance

*Service & Promotions

*Sanitation & Hygiene

*Stock & Inventory

*QCS & Operations Audit

*Communication

FAQ About Franchising Opportunity

Frequently Asked Question About Franchising Opportunity

Q 1)Is experience in the food or restaurant industry required to become a SugarBun franchise?

Q 2)What type of training do I receive?

Q 3)How many people can I send and for how long?

Q 4)Some companies place limits on the number of franchises each owner can open. What’s the SugarBun policy?

Q 5)Will SugarBun franchise to Corporations?

Q 6)When should I sign the Preliminary Agreement?

Q 7)What is the minimum Equity / Capitalisation ratio?

Q 8)Do you have a F&B supply house?

Q 9)What is the duration of the Franchise?

Q10)Will SugarBun provide site and construct the building for me?

Q11)How much is the initial franchise fee?

Q12)Is the Franchisee required to purchase all of his equipment and supply needs from SugarBun?

Q13)How much money can I expect to make from a SugarBun Franchise?

Q1 Is experience in the food or restaurant industry required to become a SugarBun franchise?

No. Although a food service background is always helpful; however, if you’re inexperienced SugarBun has a complete training program for Franchisee and management personnel. We also provide proven, successful operating procedures for you to follow.

Q2 What type of training do I receive?

Because of our commitment to your success, SugarBun has designed a thorough franchise training program. This program consists of both classroom training at our Corporate Training Center and on-the-job training at the restaurants. We also provide on-location opening assistance at the restaurant. These training and assistance are included in your initial franchise fee. However, you are responsible for any expenses incurred for transportation, food, lodging and employee salary, if applicable.

Q3 How many people can I send and for how long?

SugarBun requires the Franchisee or the managing principal (in the case where the Franchisee is a corporation) and 2 designated managers and 2 supervisors (who must pass Franchisor selection criteria) to attend and complete the training program for a minimum period of 3 months and maximum period of 6 months.

Q4 Some companies place limits on the number of franchises each owner can open. What’s the SugarBun policy?

Normal approach would be through the establishing of single unit restaurant. But SugarBun encourages the ownership of multiple unit concept through which territorial rights are granted. Upon successful development of the single unit franchise and multiple unit franchise, Franchisee can apply for area development franchise.

Q5 Will SugarBun franchise to Corporations?

Yes. SugarBun will franchise to corporations and individuals as well. Franchisee principals must own at least 75%, and personal guarantees will be required.

Q6 When should I sign the Preliminary Agreement?

When you have decided and certain that SugarBun franchise is the right business venture to go in. The commitment entails payment of franchise fee, of RM60,000/- (Malaysia only). The franchise agreement is normally sign one month before the restaurant opens for business.

Q7 What is the minimum Equity / Capitalisation ratio?

The normal ratio is 50%. This means the franchisee needs to come up with his own capital equivalent to 50% of the total investment needed. The other 50% can be from borrowings from the normal sources.

Q8 Do you have a F&B supply house?

In many states of Malaysia, we have F&B supply house to cater to the needs of the restaurants. It is not mandatory for franchisee to source all their needs from SugarBun F&B supply house except for certain controlled items and proprietary products.

Q9 What is the duration of the Franchise?

Franchise Agreement is issued on each unit for 15 years with an option to renew for another 10 years. A renewal fee of 2.5 percent of the average annual gross sales of the 14th and 15th year of the franchise will be required to help cover our administrative legal costs, and other costs.

Q10 Will SugarBun provide site and construct the building for me?

Each Franchisee is responsible for securing his or her own land and building. All potential sites must be submitted to SugarBun for written acceptance. You may choose to purchase or lease the land and construct the building. Or you may secure a lease in which the landlord constructs the building for you to our specifications.

Q11 How much is the initial franchise fee?

The Franchise Fee for a single unit is RM60,000/-( Malaysia only ). For multi-unit franchises, the initial franchise fee will be decided by the Franchisor and the same goes for area development franchise.

Q12 Is the Franchisee required to purchase all of his equipment and supply needs from SugarBun?

SugarBun has approved equipment suppliers which are selected based on their ability to offer competitive pricing, service and support. The Franchisee, may, of course, choose to purchase equipment from other approved sources. Quality specifications on equipment are provided to allow the Franchisee to purchase goods meeting these standards and specifications in the open market.

Q13 How much money can I expect to make from a SugarBun Franchise?

Many factors must be considered in determining potential earnings and profits. No warranty is implied in any projections or estimates or estimates when given by any SugarBun personnel. Prospective franchisees are advised to do their own market study and evaluations before making any commitment.

Membership

Member of Malaysia Franchise Association 

Application

Application

DOCUMENT TO BE SUBMITTED BY FRANCHISEE

FOR THE PURPOSE OF PREPARING FRANCHISE AGREEMENT

For Individual or Partnership

(1) Extract of Constitution of Company

(2) Photocopies of Identity Card/ Passport

For Company

(1) Form 24

(2) Form 49

(3) Company’s Memorandum & Articles

(4) Photocopies of all Share holders / Director’s Identity Card / Passport

(5) Registered address, telephone and fax

(6)Outlet address (location), telephone and fax