On the night of Jan. 17, a line of people began to form on Colonial Drive in Orlando, Fla. They weren’t waiting to enter a nightclub or a concert, but to be the first customers of a branch of Philippine fried chicken chain Jollibee opening the next day. It was a similar scene to when Jollibee’s flagship U.S. store opened in August 2022 at Times Square in Manhattan.
To some, the fanfare may be mind-boggling. But the company, with its iconic fried chicken product called the “Chickenjoy,” is the Philippines’ answer to the fast food giants of the U.S. The average American already eats an estimated 100.6 lbs of chicken annually, and deep frying it is a backbone of American Southern cuisine. Even in the face of competition from Chick-Fil-A, KFC, and McDonald’s, Jollibee has managed to carve out its own niche in the fried chicken market and winning over the U.S. palate, thanks in part to the more than 4 million Filipino-Americans who crave the taste of home that might include a chicken dish with a side of spaghetti.
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What started out as a ice cream parlor founded by Chinese immigrants in Manila in the mid-1970s has since expanded into a multi-billion dollar empire, managing 17 food brands—including Panda Express and The Coffee Bean and Tea Leaf from the U.S., as well as Hong Kong dim sum chain Tim Ho Wan—and more than 6,300 stores across 34 territories, almost a quarter of which are Jollibees. Jollibee Foods Corporation (JFC), the umbrella company, is one of the biggest restaurant chains in the world.
The Orlando branch may be one of 66 Jollibee stores in the U.S. since first opening a shop in Daly City, Cal. in 1998, but even in a post-pandemic world and in the face of an anticipated recession, the company still wants to aggressively grow its food service footprint. It plans to open 500 stores in North America in the next five to seven years, and even expand into China, an economy that is only just emerging from swingeing COVID-19 restrictions.
“The recession and economic downturns are short-term, and it’s temporary,” JFC President and CEO Ernesto Tanmantiong says, adding that its smaller global footprint relative to U.S. fast food rivals can still insulate the company from any future shocks. “But because our vision is long term, and we believe we can do it, therefore we stick to it.”
Tanmantiong, brother of Jollibee founder Tony Tan Caktiong, spoke to TIME about the company’s global expansion plans, its struggles in entering the Chinese market, and the evolution of the home-grown Filipino business.
The interview has been condensed and edited for clarity.
Joshua TanErnesto Tanmantiong, president and CEO of JFC
The brand has evolved from just this ice cream parlor into a local restaurant, and now it’s a growing Philippine brand. And the Filipino identity is so latched on to it. Was it a conscious decision on JFC’s part to promote or stick to the Filipino identity of Jollibee?
I think, in a way, it was just an evolution. There was no deliberate plan to do that. But I think because we are born here, we live here, so we live the Filipino values. And our corporate values in a way are quite aligned with Filipino values and practices. So we have, for instance, in our corporate values, the customer focus, I mention the spirit of family and fun, integrity, and teamwork with excellence—so all of these are actually Filipino values. And so we put that into the corporation, and we ask everyone to live with it.
What made you decide to go up against McDonald’s?
When friends were advising us to go into other businesses, we started trying to look back and do some strategic planning. And then we tried to do some competitive gap analysis. So we try to write down what are the advantages of McDonald’s versus us. And what’s the advantage of Jollibee against them? When we look at the advantages of McDonald’s, it’s a long list—more than one page. And when we look at Jollibee, what’s the advantage of Jollibee over McDonald’s: only one item. That is the product’s taste, because American products usually are bland. And then we said, “Okay. These are the advantages of McDonald’s. Can we overcome those advantages and make it even at least parity?” And we said yes, because actually, the most difficult part is the product. The others are easy to do: service, cleanliness—these are easy to do and to learn. Over time, we closed the gap of those advantages of McDonald’s. And fortunately, they were not able to close the gap on taste.
How did you come up with the idea of Chickenjoy?
The Chickenjoy came out because after the hamburger [Yumburger], we said that to be able to grow to a bigger customer base, we need more products. And fried chicken is a popular product in the Philippines. So we started with the fried chicken. But in the early years, there was still some tweaking on product development, until sometime in 1981, when we were able to almost, say, perfect the product.
So the recipe in ’81 is still the recipe used today?
Yes. That’s why [we have] the joke: instead of chickening out against McDonald’s, we serve Chickenjoy.
You’re expanding in the United States and in China. And I’m very much surprised as to how you’re dealing with fried chicken in its home turf. You’re going to be battling it out with a lot of these U.S. brands. You’re saying at least 500 stores in the next few years. How are you planning to do that?
Yeah. Fortunately, we have a very strong superior product of Chickenjoy against all the other fried chicken in the U.S. And recently, we were awarded as the best fried chicken chain in America by Eater.com. And they pit us against Popeye’s, the big players in the U.S. And so it confirms, validates our belief that we have strong products, and therefore we can win the competition over time.
We started Jollibee in the U.S. by first penetrating the Filipino market. And as we built the brand, we started to go to crossover locations. What we mean by “crossover” is a mixture of Filipino community and local mainstream markets. So far we have been successful in that stage. So we believe that we are now ready to go to the bigger market of mainstream by continually expanding in crossover locations today.
You are appealing to the Filipino customer base. Is there an awareness on Jollibee’s part that the expansion of your business seems to rest on the back of the Filipino diaspora? You’re talking about 4 million Filipinos alone in the United States. Was that a conscious choice when it came to entering the American market?
Yeah. That was a deliberate move, because we don’t yet have the brand name in the U.S. to the mainstream market. And so we capitalize on the support of the Filipino market. Fortunately, our kababayans [countrymen] are very supportive. They were actually our brand ambassadors. For instance, when we first opened our first store in Queens, New York, it was on February 14. It was winter. And that year, there was a blizzard. But despite the blizzard, the first day opening, we had long lines that queued up to four blocks [away] from the store. And then there was this American New Yorker who passed by, curious about the line and asked a Filipino in the line and said, “What is this? Who is Jollibee?” So obviously, the Filipino was so proud, trying to sell who Jollibee is. And finally, the New Yorker was convinced.
You’ve been quite aggressive in your expansion—we’re not just talking about Jollibee anymore. I’m talking about JFC: you’ve acquired Smashburger, Coffee Bean and Tea Leaf. People are predicting recessions in 2023. And yet, you have Jollibee with all of these plans, trying to spur even more growth. I’m curious, are you not at least worried or scared about what the effects of the recession might be?
If you look at the U.S. market, we’re still very small. So I think we are not yet that sensitive to the U.S. economy. Because the market is still big for us, it would have been a different story if we already saturated the entire U.S. and therefore, once the economy goes down, we immediately suffer. So we think we still have a big market for us as we expand.
China is a very interesting country in the sense that it has been roiled by lockdowns, especially with the “zero-COVID” strategy over the past two years. You’ve previously said that JFC aims to open at least 100 stores or brands under the JFC belt in China this year. Since late last year, China is reopening. I want to get what your business strategy would look like for that region in the coming year or five years.
We see a China situation similar to the Philippines. We experienced the COVID lockdown in 2020. They are experiencing that starting last year. So their situation last year was like our 2020. And with the sudden opening of the economy, we expect this year to start recovering. We hope that it will be a similar situation as last year in the Philippines where people will start coming out, revenge spending, revenge travel. So we are quite optimistic with China in 2023. We actually opened our first Tim Ho Wan store in China. Despite COVID, it was very successful. And so that’s why we made an announcement that we’re going to open 100 stores of Tim Ho Wan in the next few years.
We’re quite bullish with China. Everyone is anxious about it, to see whether it’s a full recovery or a partial recovery for China.
It’s very difficult for the Jollibee brand to get a foothold in China. There were branches open before but they struggled staying there. There was a branch in Shenzhen in 2008. Do we know what happened to that? Where is Jollibee—just the restaurant, not the food company—where is it now in China?
You’re right. We attempted to enter China actually, twice with the Jollibee brand. I think one was in the mid-1990s. The first was in Xiamen, then the second attempt was in Shenzhen. I think at that time we entered too early. And we didn’t do our homework well. And that’s why after those two failed attempts, we decided maybe the Jollibee brand is not yet ready. Instead of bringing Jollibee to China, let’s instead acquire local chains. And that’s why today we have Hong Zhuang Yuan, a Beijing congee chain. And then we have Yonghe King. And then recently, we brought in Tim Ho Wan. But it doesn’t mean that the Jollibee brand will never enter China. Recently we [have been] quite successful in Hong Kong.
Where do you see JFC five years from now?
Our vision is to be [among the] top five restaurant companies in the world. Before COVID, we were almost close to the top 10. By the way, our measurement is based on market cap. But with COVID, where the Philippines was badly hit, our rank went down to as far as number 18, during that time. Today, we’re back to about 13. And so our North star, our aim, is to be top five. But we think that cannot be achieved in five, 10 years. It’s a long term strategy. So in the next five, 10 years, we hope to be closer to the top five, maybe within the [top] six to 10 in the world.
Also today, 60% of our revenue comes from the Philippines. Medium-term we want to achieve 50%.