NINETEEN O One Sdn Bhd, owner and franchising arm of the hot dog outlet chain called 1901, is starting to make a name for itself in the local fast food industry.
Although still relatively small compared with fast food giants like McDonald's and Burger King, this company has come a long way since it launched its home-grown brand in 1997.
According to chief executive officer Tengku Rozidar Tengku Zainol Abidin, the company's annual turnover has grown by over 28 times since it started operations in 1997.
“Turnover for the first 18 months was only RM200,000. Now we are hoping to achieve a turnover of RM10mil by 2005,” she told StarBiz.
The company's income consists of three components: franchise fees, royalties and the sale of its products. About 70% of the company's revenue comes from its franchise business, which started at the end of 1998.
That said, the company is not resting on its laurels and is now on an aggressive expansion trail to increase the number of its outlets from the current 43 to reach a wider market.
“Business has been growing pretty fast and we plan to have 70 outlets by October, consisting mainly of franchised outlets, and 107 by 2007,” said Rozidar.
Nineteen O One currently has 31 franchised outlets and 12 company-owned ones located mainly in shopping complexes and hypermarkets nationwide.
There are currently 20 kiosks and 21 pushcarts. The company also licenses some of its products to be sold at Golden Screen Cinemas in the Mid Valley Megamall in Kuala Lumpur and Penang's Gurney Plaza.
Nineteen O One is also planning to set up outlets in certain Putra and Star light rail transit stations, starting with Ampang Park next month.
Rozidar said as part of its expansion plans, the company's focus going forward would be on its franchise business.
“We are very selective of our franchisees as starting a business requires a lot of hard work and long hours. We expect our franchisees to be passionate about what they do,” she said.
The company charges a RM20,000 franchise fee and fixed monthly royalty of RM1,300 for a pushcart, and RM30,000 and RM2,000, respectively, for a kiosk.
She said investment, including working capital for a pushcart, was about RM80,000, while that of a kiosk ranged from RM150,000 to RM200,000, depending on the size.
“We always conduct extensive analysis and traffic headcount on our locations first before setting up there. Generally a kiosk/pushcart would be able to generate profit within a month of opening,” she said, adding that a kiosk was expected to generate an average revenue of RM30,000 a month and a pushcart an average of RM18,000.
She said the company would also be coming up with a new concept called a mobile kiosk in the next two months.
Rozidar said 1901 was also looking at expanding overseas, especially in the South-East Asian region, by next year.
“To be a truly international player we need to have a strong market presence locally first, and I believe there is still a lot more room for us to grow here. However, if we have a good business partner, we may go ahead,” she said, adding that the company had received a lot of enquiries from Singapore, Thailand and even the Middle East.
On competition with other fast food players like McDonald's, Burger King and A & W, Rozidar said 1901 was not looking to compete with the big boys.
“We are in a different league, our outlets are small and we are basically tapping a different market. The hot dog market is a huge one, still untapped, and we want to focus on this.
“The outlook for 1901 going forward is good. Our strength lies in the taste and quality of our products and we have many loyal customers,” she said.
Always innovative and looking at adding new products to complement the hot dogs, 1901 will be coming out with a new product, Big Dream Range, cookies in a box with a take-away concept.
Rozidar said the Great Chocolate Oatmeal Raisin, the first from the range, would be available at all 1901 outlets next month.
“We also expect to introduce our vegetarian range of hot dogs in six months. It will be soy-based with no preservatives,” she said.
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