Entrepreneur 8: WALDEN CHU

WALDEN CHU

Business: Red Box Karaoke

              Coffee Bean & Tea Leaf

Category: The Young Millionaire

From working in New York as a financial analyst, he finally decided to go home last 2001 to be able to help in their family business. Together with his brother they formed a corporation with several other investors and their first venture was the Banana Leaf and Curry House, one of their favorite restaurants in HongKong.

When Banana Leaf and Curry House has already been established, they decided to venture into two more business the Red Box karaoke and the Coffee Bean & Tea Leaf.

He met the Red Box owner through his Banana Leaf franchiser and it didn't tale long for him to convince the owner that a joint venture to set up a Red Box franchise in Manila. Once he and his partners got down to building Red Box in the Philippines, they spared no expense to make it exceed any if its counterparts in Hong Kong and Malaysia. They were the first KTV to open from noon until three the next morning, and offers lunch sets and dinner buffets.

Charging is per head instead of the usual per room charges. They have 30,000 song selection in five languages: English, Tagalog, Japanese, Korean, and Chinese. They also partnered with local and international record labels, ensuring that they will always had the latest songs and music videos on hand.

As with their future plans is to allow a customer to duet with another customer from the other room and also to let customer record their singing session.

And as a way for them to know their customers better, they have a system where in they track their favorite songs and what they ordered.

Through Coffee Bean & Tea Leaf, Walden wanted to be known as "the purveyor of the best coffee and tea drinks". They negotiated and was awarded a master franchise in 2003, a time when the local scene was already crowded with a number of players. 

"I did what I do best - break all rules to making quick money, and pull all the stops in the name of quality products and good customer service."

For the first Coffee Bean branch he leased a 250 square meter space in Greenbelt 3, Makati at a time when most of the competitors were either downsizing  or seriously considering doing so. He outfitted his store with expensive fixtures and built a commissary. A commissary is a fixed cost that you spread out across different profit centers. He had zero profit center at that time , and he invested in a commissary.

"It's about investing ahead of the growth curve to ensure that there's an infrastructure in place before you don't compromise the business."

The source of their coffee beans and tea leaves are only from the top producers worldwide. They use the pricey emmental cheese for their sandwiches, romaine lettuce for their salads, and hotel-grade chicken sausages.Their pastries and cakes are freshly baked in their commissary and being delivered to their stores daily because nothing on their menu is outsourced.
In two years time Coffee Bean has grown into 11 stores in key business and lifestyle centers in Metro Manila.

GOLDEN RULE:

"Exist only for your customers. In a fickle market, that's the only decision that will last, the customer choosing you over the others."