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SugarBun franchise a local success story

by Emy Lindsay, emylindsay@theborneopost.com. Posted on July 24, 2012, Tuesday

NEW MARKET: SugarBun Bayuquan with a seating capacity of 200 opened on June 1, 2012.

KUCHING: Well-known Malaysia-made franchising business, SB Franchise Management Sdn Bhd, better known as SugarBun, is the first Malaysian homegrown fast food restaurant to expand internationally.

It is making greater inroads into the global franchise market by expanding to West Malaysia and international markets such as in China, Australia, India, United States, Middle East and Indonesia.

Speaking to The Borneo Post during an exclusive interview, general manager of SugarBun, Raymond Teo attributed the vibrant growth of SugarBun franchising business to the nation’s strong economic fundamentals especially the stable financial sector governed by Bank Negara Malaysia’s rules and regulations.

He said that comparatively between the year 2010 and 2011, SugarBun franchise business had accelerated by 83 per cent in the domestic market, whereby it had successfully opened four restaurants in Malaysia and two restaurants in Brunei Darussalam (Brunei) in 2010.

STRONG GROWTH: Teo says he is optimistic that the outlook for SugarBun franchise business will continue to be promising and the demand of the business is springing up rapidly especially in the international market.

“By the end of 2011, there were a total of 10 SugarBun restaurants within Malaysia and one in Brunei,” he said adding that the addition of these restaurants was just for the year 2010 and 2011.

Overall, SugarBun has so far established 61 franchises stores successfully with 53 in Malaysia, six in Brunei and one in Bangladesha nd China each.

Teo revealed that the growth of the SugarBun franchise was even more dynamic this year, explaining that for the first half of 2012, it had opened five restaurants within Sarawak and one restaurant in Liaoning province in China.

“SugarBun Bayuquan, YinKou in Liaoning province is the first SugarBun restaurant in China we extended our business to,” he said adding that the restaurant had a seating capacity of 200 and sales for that outlet had been very encouraging since its opening on June 1, 2012.

With the huge market opportunity abounding in China, Teo pointed out that it had aslo just opened its second SugarBun outlet in the same province on July 13, 2012.

“I’ve been busy travelling back and forth to China recently to oversee this new opening and we are very happy that everything is going according to plan,” he said.

The management was also looking forward to expand the business influence to greater heights as for the second half of 2012 onwards, a total of 11 restaurants were scheduled for opening domestically and another six more openings were on the cards for the overseas market, with one outlet in Brunei, four outlets in China and one in Melbourne, Australia.

“We are still pursuing the opening in Missouri, US pending the approval from relevant authorities,” Teo revealed.

“In Malaysia, two SugarBun Area Franchise Licences (AFL) have been awarded both in the state of Johor Bahru and Sabah respectively. With the AFL taken up in the state of Johor Bahru, we foresee it as a golden opportunity for SugarBun franchise business to penetrate fast into the other states in West Malaysia,” he said.

He informed that SugarBun’s entry into the Johor market was an open door for the awareness of SugarBun’s presence and commitment to spreading its wings strongly and steadily to capture the West Malaysia fast food market.

When asked what was the outlook for its business in the future, Teo said, “We are optimistic that the outlook for SugarBun franchise business will continue to be promising and the demand of the business is springing up rapidly especially in the international market,” he said stressing that many foreign investors were interested to invest and be a franchisee of SugarBun franchise business model.

Asked what was the initial capital outlay to start the franchise business, he replied that a minimum of RM500,000 would be required by the investor or franchisee to open a SugarBun outlet within Malaysia and the minimum size of the outlet should be 2,000 square feet.

“We have more than 30 years experience in this franchising business model and the success of our business is proven through the establishment of our many SugarBun outlets,” he added.

“This has given us the confidence and determination to further develop and improve our business model ready for future expansion especially in upgrading the Information Technology Syatem, Management & Operation Training, Quality Assurance, Marketing and Research & development,” he pointed out.

The management had two food technologists that oversee the research and development (R&D) of its food products and every new product launched by the company was initiated by the R&D team that strictly adhered to its quality control measures.

Asked on the regularity of promotions or new product launches, he said it undertook four new product launches every year to test the market as otherwise customers would get bored of the same products on the menu.

“We have to create excitement for customers to try our new products and give them more options. And through that, we can capture new customer’s preferences whilst increase our existing customers size,” he said.

Teo also stressed that SugarBun was moving towards providing health-conscious eating habits for its customers through a variety of Asian cuisine claypot menus and the natural progression of not using flavour enhancer monosodium glutamate (MSG) in its food in the near future.

“Our menus are wide and range for a wider age demographic group as we offer deep fried fast food for the younger generation and few home-cooked items such as the claypot with rice menus for the older generation,” he opined.

Notably, SugarBun was the first Malaysian homegrown fast food restaurant to achieve the MS ISO 9002 certification, which is regarded as the highest industry operating standards.

He concluded that there was tremendous growth opportunities in the SugarBun franchise system with its average net return of minimum of 15 per cent for the franchisee.

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