Local culinary franchises have become one of the main pillars in the food and beverage industry in Indonesia. With proven successful concepts, there are many strategies that business players can adopt to achieve similar success.
Here are strategies from 7 local franchise brands that can be emulated to build a successful local culinary franchise business:
1. Kebab Turki Baba Rafi
Case Study:
In 2003, Hendy Setiono began his business journey with a small Kebab Baba Rafi cart in the city of Surabaya. Although kebabs originate from Turkey, Hendy not only served them with a distinctive Indonesian flavor but also introduced a friendly and innovative service concept. Initially, many people even thought that this brand came directly from Turkey, which shows the level of authenticity and quality of the products offered.
In a short time, specifically two years later, in 2005, Hendy officially established PT Baba Rafi Indonesia as the trademark holder of Kebab Baba Rafi. His business success was not limited to the local area; Hendy also saw great potential in his kebab business model.
Therefore, he began to develop a franchise system to expand his business reach throughout Indonesia.
Kebab Turki Baba Rafi's international expansion began in 2012 with their presence in the Philippines and Malaysia. This was a strategic step taken to capture a broader market in Southeast Asia. This success was then followed by their presence in Sri Lanka in 2013, and China in 2014.
Through dedication and focus on brand development, Kebab Turki Baba Rafi continues to grow with new outlets in the Netherlands, Singapore, Brunei, Bangladesh, and India in 2015.
This achievement is not only supported by a unique product concept but also by consistent quality and service. Based on the data they have, Kebab Turki Baba Rafi has successfully created a captivating culinary experience for customers in various countries, and this is reflected in the significant business growth both domestically and in the international market.
Business Strategy of Kebab Turki Baba Rafi:
- Local Flavor Adaptation and Friendly Service: Kebab Baba Rafi successfully attracted the local market by adapting the distinctive Turkish kebab flavor to suit the taste of Indonesians. This strategy is reinforced by a friendly service concept, which makes customers feel valued and comfortable. The combination of products tailored to local tastes and good service creates strong customer loyalty.
- Expansion Through Franchise System: One of the keys to Kebab Baba Rafi's success is business development through the franchise model. After establishing PT Baba Rafi Indonesia in 2005, Hendy Setiono took the opportunity to quickly expand his business network through franchising. This strategy allowed for rapid growth and the spread of outlets in various cities in Indonesia and internationally. The franchise system also helps in standardizing operations and product quality at each outlet.
- Aggressive International Expansion: Kebab Baba Rafi not only focuses on the domestic market but also takes bold steps to enter the international market. Starting from the Philippines and Malaysia in 2012, then to Sri Lanka, China, and various other countries, this expansion shows Kebab Baba Rafi's commitment to becoming a global player. By entering new markets aggressively, they can increase brand awareness and create new growth opportunities outside of Indonesia.
2. Warteg Kharisma Bahari
Case Study:
This story began in 1996 when Sayudi, the owner of Warteg Kharisma Bahari and Kharisma Bahari Group, established his first warteg in South Jakarta under the name MM (Modal Mertua), which means "In-Law's Capital". This name was chosen because the initial capital to open the warteg came from a loan from his in-laws, who used their house certificate as collateral to take out a loan from the bank.
Initially, the warteg stood in a semi-permanent building provided by the local government at that time. After having enough capital, Sayudi then rented a place and opened his warteg officially.
The idea to open a partnership with Kharisma Bahari Group actually came about accidentally. Initially, they had three branches, two of which were only managed by employees. However, over time, the management of these branches became disorganized and unprofitable. To address this issue, Sayudi invited friends or family who wanted to open a warteg but did not have the capital, with a 50-50 profit-sharing system.
Since then, Kharisma Bahari Group has opened partnerships with investors who want to join. With an investment of Rp. 130 million excluding kiosk rental fees, investors can own one warteg outlet. If the investor requests employees from Kharisma Bahari Group, the partnership is in the form of profit sharing, where the net profit is divided in two: 50 percent for the manager and 50 percent for the investor.
Business Strategy of Warteg Kharisma Bahari:
- Flexible Partnership Model and Risk Sharing: Warteg Kharisma Bahari offers a flexible partnership model with a 50-50 profit split. This allows potential partners who do not have large capital to join and open a warteg with the risk shared between the manager and the investor. This strategy is not only attractive to those who want to invest in the culinary business but also helps to quickly expand the warteg network.
- Utilization of Resources and Operational Support: Warteg Kharisma Bahari provides an option for investors to get operational support from the Kharisma Bahari team. By providing trained employees and a proven management system, this franchise ensures that the quality of service and food standards are maintained at each outlet. This reduces operational risk for investors and increases the consistency of customer experience.
- Collaborative Approach to Expansion: The strategy of inviting friends and family who want to open a warteg without capital with a profit-sharing system is an effective collaborative approach. In this way, Kharisma Bahari not only builds a solid business community but also strengthens personal relationships that can increase trust and commitment in managing the warteg. This strategy also allows for the rapid and efficient expansion of the warteg network
3. Kopi Janji Jiwa
Case Study:
Becoming an icon in the Indonesian coffee industry, Janji Jiwa has made its mark since it first operated in 2018. Currently, their network has expanded with more than 900 outlets spread across more than 100 cities in 33 provinces throughout the country.
Initially founded by Billy Kurniawan in Kuningan, South Jakarta, Janji Jiwa has become a pioneer in the coffee trend in the country. Billy, a management graduate from Seattle University, brought his interest in coffee into his business work. With a capital of Rp 70 million, he started a coffee business under the name that reflects his commitment and spirit, "Janji Jiwa".
Billy, known as a daring entrepreneur, holds the principle to act first and enjoy the process. Before creating his mark in the coffee world, Billy successfully managed a bubble tea business under the name Calais.
In recent years, Janji Jiwa has shown its innovation by becoming part of the Jiwa Group, which includes three product brands: Janji Jiwa coffee, Jiwa Toast, and Jiwa Tea. Through this breakthrough, they have become the top choice for Indonesians who want to enjoy a quality coffee experience.
Despite facing challenges from stiff competition and the impact of the COVID-19 pandemic in 2020, Janji Jiwa remained adaptive. They strengthened delivery services and direct purchases (take away), as well as launched a mobile app to make it easier for customers to order coffee from wherever they are.
With more than 1,100 outlets spread across Indonesia in 2022, Janji Jiwa has become one of the leading local coffee brands capable of competing with international brands. Their achievements are recognized through various awards, including the 2019 MURI Record for the Fastest Coffee Shop Growth In One Year.
Under the leadership of Billy Kurniawan, Janji Jiwa has also created jobs for more than 3,000 operational employees and managed to sell up to 15 million cups of coffee every month. With a commitment to quality and continuous innovation, Janji Jiwa continues to be the top choice for coffee lovers in Indonesia.
Business Strategy of Kopi Janji Jiwa:
- Rapid and Extensive Expansion: Janji Jiwa has successfully built a wide network with more than 900 outlets spread across more than 100 cities in 33 provinces of Indonesia in a relatively short period. This aggressive expansion strategy helps them reach a broader market and strengthen their brand presence throughout the country
- Product Diversification: By forming the Jiwa Group which includes three product brands, namely Janji Jiwa coffee, Jiwa Toast, and Jiwa Tea, Janji Jiwa has successfully diversified its products. This helps them attract a wider market segment and provide a variety of choices for consumers. Diversification also helps them overcome challenges during the pandemic by offering alternative products and increasing revenue through different sales channels
- Adaptation to Market Changes: Amidst tight competition and the impact of the COVID-19 pandemic, Janji Jiwa has successfully adapted quickly. They strengthened delivery services and direct purchases (take away), as well as launched a mobile app to make it easier for customers to order coffee. This adaptation strategy allows them to remain relevant and maintain their market share amid changing consumer behavior and uncertain market conditions
4. Kopi KULO
Case Study:
Kopi Kulo was founded in December 2017 by Michelle Sulistyo, with the first outlet located in Cikajang, South Jakarta. As a pioneer of the grab and go concept, Kopi Kulo offers a unique taste that makes it special. One of their favorite menus is a combination of avocado juice, espresso, and ice cream, which has been quality tested.
Kopi Kulo is part of the KULO Group and within two years, the business successfully opened 250 outlets throughout Indonesia. This achievement attracted the interest of many businessmen who saw the potential profit from this franchise. Although there is no official information regarding the investment cost for the franchise or partnership on the official KULO Group page, some sources mention that the Kopi Kulo franchise fee ranges from Rp 125 million to Rp 155 million.
KULO Group provides full support to its franchise partners, including supervision from the center and training for employees before the outlet is opened. This ensures that each outlet has a uniform work system and product quality according to the standards set.
One of the advantages of Kopi Kulo is the flexibility for partners to innovate by adding new menus that have the potential to sell in their area. Although this new menu is outside the control of the center, as long as it follows trends and adjusts to local tastes, the menu tends to be favored by the market.
With innovative strategies and comprehensive support, Kopi Kulo continues to grow rapidly, becoming a favorite of many people and attracting the interest of prospective entrepreneurs in Indonesia.
Business Strategy of Kopi KULO:
- Grab and Go Concept with Unique Menu: Kopi KULO carries the grab and go concept that makes it easy for customers to buy coffee quickly and practically. In addition, Kopi KULO offers a unique and innovative menu, such as a combination of avocado juice, espresso, and ice cream, which distinguishes it from other coffee shops
- Rapid Expansion through Franchise: Within two years, Kopi KULO successfully opened 250 outlets throughout Indonesia through the franchise system. This rapid expansion strategy allows Kopi KULO to quickly reach a broader market and increase brand recognition in various regions.
- Support and Flexibility for Franchise Partners: Kopi KULO provides full support to its franchise partners, including supervision from the center and employee training to ensure consistent product quality and service.
- In addition, Kopi KULO gives partners the freedom to innovate by adding menus that match trends and local tastes. This flexibility allows partners to tailor their offerings to the needs of the local market, increasing the success chances of each outlet.
5. Esteh Indonesia
Case Study:
Esteh Indonesia was established in 2018 with a founding team consisting of Haidhar Hibatullah Wurjanto, Dihya Nur Rifqy, Aussie Andry, and Edwin Widya. They started their business by selling iced tea in the Kemang Village and Blok M areas using a small booth, only 1x2 meters. Their initial menu consisted of Sweet Iced Tea, Lemon Iced Tea, Lychee Iced Tea, Milk Iced Tea, and Thai Tea.
Thanks to positive customer feedback and high demand, Esteh Indonesia began opening additional outlets at Mall Ambassador and Binus West Jakarta in mid-2018. Its popularity continued to increase due to its delicious taste, affordable prices, a wide variety of products, and being trendy according to trends.
In mid-2019, Esteh Indonesia opened an outlet on Pandu Raya Bogor and changed the concept to grab and go with a larger outlet size, 3x5 meters, and had three employees. At the same time, Danu Sofwan and Brisia Jodie joined as shareholders and brand ambassadors of Esteh Indonesia.
Seeing the high interest in its business opportunities, Esteh Indonesia decided to open partnership opportunities in September 2019 and was officially established as PT. ESTEH INDONESIA MAKMUR on September 11, 2019. By the end of 2019, Esteh Indonesia successfully opened 19 outlets and partnered with leading online delivery services such as GoFood, GrabFood, and ShopeeFood.
Despite the COVID-19 pandemic, Esteh Indonesia continued to grow rapidly. From 19 outlets at the beginning of 2020, they managed to increase the number of outlets to 200 by the end of 2020. With a simpler and more elegant outlet concept, Esteh Indonesia still maintains a strong brand identity.
In 2021, Esteh Indonesia became even more famous with collaborations with well-known brands, influencers, and famous Indonesian artists, making the demand to join even higher. By the end of 2021, the number of Esteh Indonesia outlets reached 450. Esteh Indonesia continues to uphold high standards in product quality and service to customers.
In maintaining the vision of becoming a market leader in the food and beverage industry that produces quality entrepreneurs, Esteh Indonesia provides training to each partner on product quality management, customer service, promotion, profit calculation, and maintaining brand reputation.
In terms of branding, Esteh Indonesia is active on social media such as TikTok, Instagram, and YouTube to provide interesting content to their customers.
Business Strategy of Esteh Indonesia:
- Focus on Product Quality and Service: Despite experiencing rapid growth, Es Teh Indonesia remains focused on product quality and service to customers. They uphold high standards in concocting drinks and provide training to employees to ensure consistent product quality and service at each outlet. This helps them maintain customer loyalty and build a good reputation for their brand.
- Active Branding Strategy on Social Media: Es Teh Indonesia actively utilizes social media, such as TikTok, Instagram, and YouTube, to strengthen their branding. They present interesting and relevant content for their audience, ranging from product promotions to entertaining creative content. With a strong presence on these platforms, Es Teh Indonesia can build greater engagement with their customers, increase brand awareness, and attract more people to try their products.
- Rapid Expansion with Grab and Go Concept: Es Teh Indonesia implements a rapid expansion strategy by introducing the grab and go concept. They started with small and booth-sized outlets, 1x2 meters, then gradually opened outlets in strategic locations such as Kemang Village, Blok M, Mall Ambassador, and Binus West Jakarta. This grab and go concept allows customers to buy products quickly and practically, in line with the trend of a busy and fast lifestyle.
6. Mie Gacoan
Case Study:
Mie Gacoan, which has been established since 2016 in Malang City, quickly became the spotlight for culinary enthusiasts. As part of PT. Pesta Pora Abadi, a well-known company in the culinary world in Indonesia, Mie Gacoan became the brainchild of Harris Kristanto. Harris, an economics graduate, is not only the owner but also the director of human resources at the restaurant.
Harris stated that in six years of operation, this noodle business has generated profits of 40-50% of sales turnover, an extraordinary achievement considering the tight competition in the noodle business. From initially only operating in Malang, Mie Gacoan expanded rapidly with expansion to other major cities such as Surabaya, Yogyakarta, Medan, Bali, Solo, Bandung, and many more.
With a vision to become the best noodle restaurant in Indonesia, Mie Gacoan plans to open more branches in other cities. Currently, they have created more than 3,000 jobs, and with continued expansion, this number will continue to grow.
Mie Gacoan is also present on various online food delivery applications, expanding their sales reach. Known for its spicy noodles that many people love, Mie Gacoan has become one of the most popular restaurants in Indonesia despite only offering a few menu variations.
Delicious noodle menus and a variety of sweet drinks, served in a comfortable restaurant environment, keep customers coming back. Affordable prices but still with a delicious taste strengthen the appeal of Mie Gacoan, making it always crowded with visitors. With its rapid expansion and increasingly solid reputation, Mie Gacoan has become one of the leading noodle restaurants in Indonesia.
Business Strategy of Mie Gacoan:
- Rapid and Extensive Expansion: Mie Gacoan implements an aggressive expansion strategy by opening outlets in various major cities across Indonesia, such as Surabaya, Yogyakarta, Medan, and Bali. This expansion allows them to reach more customers and expand their market share.
- Combination of Specialization Menu and Affordable Prices: Mie Gacoan focuses on serving delicious spicy noodles at affordable prices. Despite offering a few menu variations, they have successfully attracted customers with their distinctive taste quality and friendly prices.
- Use of Online Food Delivery Applications: Mie Gacoan takes advantage of online food delivery applications to expand their sales reach. By being present on various food delivery platforms, they can reach more potential customers and strengthen their brand presence in the market.
7. Kopi Kenangan
Case Study:
Kopi Kenangan is one of the success stories in the realm of Indonesian coffee. Pioneered in 2017 by the trio Edward Tirtanata, James Prananto, and Cynthia Chaerunnisa, the first shop was located in the Kuningan area. The first day of Kopi Kenangan's opening immediately made an achievement with the sale of 700 cups of coffee. Two years later, the Kopi Kenangan network has expanded with more than 230 shops spread throughout Indonesia.
CEO and Co-Founder of Kopi Kenangan, Edward Tirtanata, shared his experience, starting from the coal business with his father to finally switching to the consumer goods business. According to him, the consumer goods business offers better price control. Initially, he tried his luck with a tea business named Lewis & Carroll, but then realized that the coffee market had greater potential.
In 2018, Kopi Kenangan successfully obtained funding of Rp 121 billion from Alpha JWC, followed by an injection of funds of Rp 288 billion in 2019 from Sequoia India. With sufficient capital, Kopi Kenangan set a target to have 1,000 outlets by 2021.
Kopi Kenangan is known as one of the fastest-growing beverage retailers in Southeast Asia. In May 2020, they managed to raise Series B funding worth USD 109 million or equivalent to Rp 1.63 trillion. This funding was led by Sequoia Capital and involved new investors such as B Capital, Horizons Ventures, Verlinvest, Kunlun, Sofina, and Alpha JWC.
Business Strategy of Kopi Kenangan:
- Affordable Coffee Shop Concept: Kopi Kenangan adopts a coffee shop concept that offers coffee at affordable prices, similar to the Starbucks concept. This allows them to reach a wider market segment, including those who are more price-sensitive but still want good-quality coffee beverages.
- Rapid and Aggressive Expansion: Kopi Kenangan applies a rapid and aggressive expansion strategy by opening more than 230 outlets within two years. Their target was to have 1,000 outlets by 2021. This expansion enables them to broaden their geographical coverage and increase brand awareness throughout Indonesia.
- Strong Funding and Investment: Kopi Kenangan has successfully secured significant funding capital from various investors, including Alpha JWC, Sequoia India, and Sequoia Capital. With strong capital, they can further grow their business, including opening more outlets and developing new products.
Conclusion
The success of local culinary franchise businesses does not happen by chance—it requires the right and effective strategy. Through the seven local franchise brand strategies discussed in this article, culinary business players can find inspiration for developing their business through the franchise concept.
Expansion and Growth: Rapid and wide expansion is a hallmark of many of the business cases mentioned above. From domestic to international expansion, such as those carried out by Kebab Turki Baba Rafi, Kopi Janji Jiwa, and Kopi Kenangan, or franchise network expansion as adopted by Warteg Kharisma Bahari and Kopi KULO, fast growth helps in market expansion and brand presence enhancement.
Support and Investment: Capital investment and external support, such as venture capital and funding from investors, help strengthen business positions and facilitate faster expansion. This is evident from the cases of Kopi Kenangan, Janji Jiwa, and Mie Gacoan, which successfully secured significant funding from leading investors.
Focus on Quality and Service: While growth and expansion are important, maintaining product quality and customer service remains the top priority. This is reflected in all the business cases above, where they consistently uphold high-quality standards and ensure customer satisfaction as the main focus of their operations.
Product Innovation and Service Concepts: Every successful culinary business has uniqueness in its products or services. Whether it is adapting local flavors like Kebab Turki Baba Rafi and Kopi Kenangan, flexible partnership concepts from Warteg Kharisma Bahari, unique menus from Kopi KULO, or a grab-and-go concept with an attractive menu as promoted by Esteh Indonesia and Mie Gacoan, innovation is the key to winning customers’ hearts.
One form of innovation and adaptation in the F&B business, especially local culinary franchise businesses, is by implementing technology, such as using a cashier application or a PoS. Opaper App is a solution that can help with all operational matters of your culinary business.
With complete and easy-to-use features, Opaper App allows you to manage inventory, handle sales transactions, and analyze sales data more efficiently. This way, you can improve productivity and operational efficiency of your culinary business, allowing you to focus on growth and development.
Schedule a demo with our team now, or you can try downloading the Opaper App yourself on the Play Store or App Store.