How Mister Donut built 2,200 stores in the Philippines

Jerome Castaneda Tuguin was just a young school boy when Mister Donut opened its first store in the Philippines along Recto Ave. in Manila in 1982.  Now, Tuguin oversees a network of more than 2,200 Mister Donut outlets all over the country.  “Year after year, the number of Mister Donut stores grew, and now we have over 2,200 shops, including innovative tie-ups with leading convenience stores, petroleum  stations and cinemas,”  he says.

Jerome Tuguin

Tuguin is the general manager of Mister Donut in the Philippines, which is among the most well served markets of doughnuts or simply donuts.  He says the growth of franchising, the rise of the food kiosk industry, the penchant of the Filipinos for donuts and the vibrant economy provide opportunities for further expansion of Mister Donut in the country.
“We are optimistic that the kiosk and street stall industry which we belong to will continue to survive and thrive in the foreseeable future. The country’s strong economic performance these past couple of years as well as the positive outlook in the next three to five years will definitely sustain the demand for affordable, delicious, and value-for-money products offered by the kiosks and street stalls,” he says.
Mister Donut is an American brand that was established in Boston in 1955 and expanded rapidly through franchising.  Its products include donuts, coffee, muffins and pastries.  The Ramcar Group acquired the master franchise of Mister Donut in the Philippines through subsidiary Food Fest Inc. in 1995.
Tuguin says Mister Donut founder Harry Winokur banked on the idea that fresh donuts are best enjoyed with coffee.  Winokur started delivering fresh donuts to office workers in downtown Boston and eventually became a well-known donut establishment that offers delicious donuts and a special blend of coffee, now recognized as world-famous.
Many entrepreneurs expressed interest in Winokur’s idea and began selling franchises of his donut and coffee company to businessmen who share the same standards of quality, service and cleanliness.  As a result, Mister Donut opened in 275 locations across the United States and America.
Mister Donut expanded to other countries when Multifoods, one of the world’s largest food companies, acquired the business from Winokur.  In Asia, Japan’s Duskin Co. Ltd. obtained the rights of the Mister Donut trademark in 1983 and paved the way for the brand’s development all over the continent, including the Philippines.
Tuguin says in the Philippines, Mister Donut offers 60 varieties of donuts, which have the right degree of sweetness. “Mister Donut also offers baked products, sandwiches, light meals and beverages.  New addition to our donut line is our Pon De Ring, Do-ssant and French Cruller,” he says.
Tuguin, who worked for RFM Corp. and Seattle’s Best Coffee before he joined Mister Donut, is among the brains behind the growth of the franchising industry.  He obtained a degree in Economics from San Beda College and a Master of Entrepreneurship Degree from the Ateneo Graduate School of Business. He completed his secondary education at Manila Science High School in 1991 and his elementary education at Don Bosco Technical College in 1986.
Tuguin advises budding entrepreneurs to carefully study any business, before engaging in it.  “Research the company you are entering into. You already know of those fly-by-night franchises that comes at P25,000, but after you have received your acrylic food stand, nothing comes after, and there is no more support from the franchisor,” he says.
He says entrepreneurs should talk to other franchisees.  “That’s the only way to know the system, the products and the support that the franchise business is giving,” he says.
Tuguin says the franchisee should not depend too much on the franchisor.  “Do not think that the franchisor will do it all for you.  There’s a misconception that when you get a franchise business, your success is already guaranteed. The truth is, much of the hard work will come from the franchisee. A franchisor’s business model may be great, but without a franchisee’s commitment to the business, nothing great will ever be achieved,” he says.
He says Mister Donut helps franchisees become successful entrepreneurs, which also contributes to the growth of the brand.  He says despite the large number of competitors and new players in the market, Mister Donut strongly continues to be one of the largest donut chains in the country.
“In fact, last 2013, food industry has been challenged by the entry of new kiosk concepts in the market, not to mention the calamity that hit Visayas and Mindanao, but Mister Donut still managed to grow its sales and income compared to previous years,” he says.
“Capitalizing on the growth momentum of 2013, Mister Donut sees growth to continue this 2014, both in sales and number of shops,” he says, adding that franchising will continue to support the growth of the brand.
“The investment differs from brand to brand, depending on the type of equipment and product offering. Mister Donut’s franchise concepts start for as low as P145,000 only,” he says.
“While we have a strong marketing campaign, logistical support and brand presence nationwide.  Mister Donut has very simple operations with continuous training available for each member of the store team,” he says.
“In terms of the site acquisition, more than 30 years of experience has given Mister Donut an accurate read on site analysis. Mister Donut uses a scientific approach on studying its locations, giving the franchisee an accurate understanding of the site’s market, thus giving the franchisee great leverage against the competition,” he says.
He says Mister Donut will continue to team up with “would-be” entrepreneurs who see the value in being a Mister Donut franchisee as well as forging alliances with the biggest players in convenience stores, petroleum and institutional sales arena.
Tuguin says with over 2,200 outlets spread across the nation, Mister Donut has become the most accessible and most visible donut brand in the country today.  “We will continue to build Mister Donut shops in areas that will allow us to serve our products where our targeted consumers are located, thus bringing us closer to them,” he says.
“Mister Donut’s  adherence to serving products of the highest quality, continuous innovation, customer satisfaction, operational rapport with our franchisees, strong back-end support, and taking care of our people in the organization have allowed us to be on top of our game, so to speak. We will continue to work on making improvements in the way we do things so that we will be able to delight our customers,” he says. RTD