Max’s Group shifts focus on franchising for expansion

“As we have a portfolio of 35 percent franchised to 65 percent company-owned, the intent is to reverse that in the next three to five years, where we will have more franchised outlets in the pipeline rather than company owned, reaching our goal of 1,000 stores by 2020,” he told reporters after MGI’s stockholders’ meeting on Wednesday. (Photo: www.maxsgroupinc.com)

MANILA — Max’s Group, Inc. (MGI) touted as the country’s leading casual dining chain, has reduced its capital expenditures (capex) to PHP600 million for 2018, as it refocuses its efforts to franchising for expansion to sustain double-digit growth.

The company spent PHP800 million in capex last year.

MGI President and Chief Executive Officer Robert Trota said it planned to roll out 80 to 90 new outlets here and abroad this year, 55 of which are going to be franchised.

“As we have a portfolio of 35 percent franchised to 65 percent company-owned, the intent is to reverse that in the next three to five years, where we will have more franchised outlets in the pipeline rather than company owned, reaching our goal of 1,000 stores by 2020,” he told reporters after MGI’s stockholders’ meeting on Wednesday.

Trota said all 16 to 20 overseas outlets will be franchised this year, noting MGI has no intention to open any company-owned stores.

MGI currently has 618 locations in the Philippines and 55 branches overseas throughout various cities in North America, Middle East and Asia as of yearend 2017.

“As 2018 comes in, we are still going to secure territories but not maybe six to eight, maybe we are looking at two to four territories. And right now, we’re talking to somebody in Australia and in Vietnam,” added Trota.

For his part, MGI Chief Finance Officer Dave Fuentebella said the firm’s topline growth for the past two years has been double-digit.

“There are two things that we are planning to do now: to continue that momentum in terms of double-digit growth and ensure also cost competitiveness, such that it will translate into a better bottom line this year,” he noted.

Meanwhile, the company earmarked PHP600 million in capex for the construction of new stores, renovation of select flagship outlets, and modernizing existing commissary systems and equipment.