THERE was a time when I asked the late businessman Jose “Don Pepe” Layson how he started in business.
“It started in college,” he said. “When I noticed my classmates going out for merienda during vacant periods, that motivated me to sell them soft drinks and sandwiches so that they would not have to go out.”
He said that if I wanted to go into business, I should read stories about successful entrepreneurs. I did and learned about “amazing beginnings.”
In 1873, a German named Levi Strauss was manning his dry goods store in San Francisco, California when he noticed the need of the gold miners for clothes built to endure tough work in the diggings. He had a tailor reinforce overall denims with copper rivets. Thus began Levi’s blue jeans.
It amazed me that the soft drink industry sprang from one man’s curiosity. In August 1888, American druggist Asa Chandler saw a fountain attracting passengers-by who would sip the carbonated drink from it. He bought the rights to this soft drink and called it Coca-Cola. By the turn of the century, almost every store in Atlanta had a counter with Coke fountain from where a customer could sit down and sip for five cents.
The product was so “addictive” that he sought the help of a friend on how to expand his operation without the customers having to come to a fountain to sip. He was sure that, given wider exposure, the product would boom.
One day, this friend excitedly burst into his office. He would tell Chandler how to do it, provided the latter would “buy” his idea for a hefty fee.
At first hesitant, Chandler eventually wrote his friend a check on the assurance that the formula would make him a millionaire. The friend whispered two words: “Bottle it.”
From then on, consumers no longer have to drink soft drinks from a fountain. They are now all over the world in bottles, and most recently in cans, too. Everybody can now bring home bottles and cans to open when thirsty.
What Chandler paid his friend for was the wisdom to leverage time, effort and location by bottling his product, thus maximizing productivity.
From that humble beginning, Coca-Cola has become one of the top money-making corporations worldwide.
Much later, in the early 1950s, an appliance salesman named Ray Kroc frequently ate at a fast-food restaurant called McDonald’s. There were times when he had to wait long because many other customers had come ahead. If he could own the restaurant, he thought, he could retire from selling milk shakers. And so he offered the owner an amount hard to refuse. The business prospered, enabling him to accumulate money and build branches.
There came a time when Ray could no longer find time to handle the expanding business. By then, franchising – or selling to others the authority to replicate a business – had been introduced. Kroc thought of franchising McDonald’s. But he did not content himself with collecting payment from franchisees. He imposed strict “quality control” among interested franchisees.
To this day, any businessman interested in buying a fast-food franchise has to train, or send a representative, to a training center. Nobody is allowed to depart from the standard menu without authority from the corporation.
It is to Ray Kroc that other franchised fast-food chains owe a favor. They make millions of dollars just by selling to others the right to copycat their fast-selling products. (hvego31@gmail.com/PN)
