Interview with Mr Ron Mullers of Eatertainment International

Franchise

Mr Ron Mullers, President Director

gbg	Eatertainment International holds numerous restaurant franchises such as Papa Ron’s and Amigos. What are the strategies being applied to date to expand the company?
Mr Ron Mullers	Before the company went public we owned many international franchise brands such as Pizza Hut in Indonesia, but what we see sometimes is the difficulties international brands experience in adapting their food to the local tastes. Jakarta is a very international city but the minute you go out of Jakarta you need to adapt your product to very different consumers. Papa Ron’s and Amigos are the two brands that we currently want to expand. In terms of which areas, I believe that East Indonesia will be very interesting for us as there is less competition. We are considering extending the brand there but always under the form of a franchise. Our plan for the future is that we are going to expand through franchising and we are looking for other franchises from the United States who need help setting up here in Indonesia. I, being a member of the Hotel and Restaurant Association and one of the directors for international relations means that I am very aware of the policies and regulations applicable to foreign investors in the hospitality and restaurant sector.
gbg	Indonesia is a highly attractive market for franchise opportunities in the restaurant sector given the boom in private consumption. What would you say are the main challenges for companies wishing to set up a franchise in the country?
Mr Ron Mullers	The main challenge is in the human resources to run a successful franchise effectively. There are some 300 million people here but people need systems to work well. They need foreign firms to come here with proven systems that work but at the same time these companies must adapt to the local culture. Workers in Indonesia are very hard working but the problem is when it comes to hiring managerial staff. They have cultural difficulties when it comes to reprimanding their subordinates for example. Another problem that Indonesia faces in this sector is that franchising laws are still very weak. The laws to protect foreign investments are also weak so foreign investors must make sure they have strong legal foundations and binding contracts before entering the market.
gbg	Does the company plan on building on the success of the Papa Ron’s brand in markets outside of Indonesia?
Mr Ron Mullers	We would like to take the brand abroad and we have previously spoken about taking it to China or the Middle East. It is just a case of finding the right partner in the market and then we will take it abroad and we are ready for that. We have been in talks with potential partners in China but as yet there has not been any result.
gbg	The company has served as a local partner for foreign firms in the past, would further partnerships be of interest for the future?
Mr Ron Mullers	We are open; many of the partnerships we had have been in franchising where we bought the rights to Indonesia. Now we would be interested in a joint venture where the foreign partner also puts equity into the project so the risk is shared. We are open to such ventures not only in the restaurant sector but also in other sectors such as hospitality. There are so many opportunities in Indonesia in all sectors and the country is heading in the right direction. The main challenge is finding the right partner. Groups like ourselves are always interested to work with a foreign partner when the right opportunity comes in.