Baking your daily bread

At this neighborhood bakeshop, slices of young coconut or buko pie sell for P4, pineapple pie, P3.50; and fruitcake, P5. And on these cool, rainy mornings, who among the harried as well as hurried working class could resist the lure of hot bread or pan de sal, plain or buttered, dipped in black coffee?

To benefit the families of plain Juans and Juanas, Julie Bakeshop, a phenomenal success in Cebu, has brought its promise of "hot bread every hour" to neighborhoods in Luzon and Mindanao.

"We bake all our products in very sanitary conditions with the best ingredients available. We are very strict on this," said Antonio Pandes, franchise director of Julie’s Franchise Corp.

Slow but sure

Rodrigo and Julia Gandionco were running a canteen concession for two of Cebu’s biggest rattan factories when the owner of the bakery which supplied them with different breads for their 24-hour operation suggested they put up their own bakeshop. "The Gandioncos were buying almost everything the bakery was producing, having to supply meals and snacks to over 2,000 workers all day and all night," said Pandes.

So, the Gandioncos got a baker and, in 1981, opened their first bakeshop in Wireless, Mandaue City. The family slowly built the new enterprise by opening new outlets and introducing new products.

In 1998, the chain opened itself to franchise opportunities and Julie’s Bakeshop can now be seen in over 300 locations across the country. The Gandionco family still owns around 95% of the outlets in Cebu province. Outside Cebu, however, chances are the Julie’s Bakeshop in your neighborhood is a franchise.

"Julie’s anchors its success on the superior taste and freshness of its products and its chain of clean and convenient bakeshops throughout the country," said Pandes.

Buying in

A prospective franchisee of Julie’s Bakeshop faces quite a logistics challenge. Setting up a branch can cost anywhere from P800,000 to P2 million to cover store construction, the purchase and installation of machinery and kitchen equipment, insurance, other pre-operating costs and the franchise fee.

The start-up costs depend largely on the choice of location and the store size. "Our franchisees in Metro Manila and Luzon, for example, have to cope with higher rental costs and higher deposit and advance payment requirements," said Pandes.

A minimum of 60 meters is needed to accommodate the store space and the kitchen. If the space is owned by the franchisee and can be renovated or fixed at minimal cost, then the basic equipment like the oven, the kneader, the roller and other baking requirements will add up to only P250,000. The one-time franchise fee is P150,000.

Since its target market are blue collar workers, the ideal branch locations of Julie’s Bakeshop are in front of churches, within public markets, at major intersections and other areas with regular high-people traffic.

Non-financials

Aside from the financial requirements, the franchisee also has to hire a chief baker and one to two assistant bakers. The franchisee, bakers and other staff undergo intensive training prior to opening shop. A bakery operations specialist stays with the new store franchise for a few weeks to ensure it adheres to strict standards for sanitation and product freshness.

"Our specialists observe the operations and help estimate the quantity of products to bake daily. Remember, we promise ‘hot bread every hour’. The pan de sal should be pulled out if it hasn’t been sold after four hours. There is a method to estimating this correctly and we share this with our franchisees," said Pandes.

Envisioning a Julie’s Bakeshop in every town, the Gandioncos are aiming for 750 branches by 2006. Its current franchisees are very satisfied with the partnership, with some quite grateful for a return on investment in less than a year. The average ROI is about 18 months.

"If our studies on the proposed location show the payback will exceed two years, we will normally not approve a franchise application. We also want our franchisees to be happy with their business," said Pandes.

Now with some 200 products, Julie’s Bakeshop is famous for its crusty onion bread and binangkal, a sesame seed-covered sweet bread that sells for P3 each. To meet the sweet tooth of customers in Metro Manila and northern Luzon, the bakery chain will introduce next month 20 different cakes, rolls and pastries, including strawberry, banana and carrot cakes.

Staying focused on its regular patrons, these new products will naturally be affordably priced.