George Yang's success tip: Be honest,persevere and work really hard
Luck is a dividend of sweat. The more you sweat, the luckier you get. — Ray Kroc
One of the most accomplished business and civic leaders of the Philippines is McDonald’s Philippines master franchisee, the Wharton-educated George Yang. He recently agreed to give
The Philippine Star
an exclusive interview at McDo Greenbelt 1 in Makati Avenue, Makati City over lunch of Quarter Pounder (mine with cheese and his without cheese), delicious hot French Fries and warm water.
When this writer was a freshman college student at the Ateneo and Philippine economic crisis forced the college paper Guidon to cut down issues, I wrote to two business leaders then to solicit advertising and got full-page ads from then Ayala Group chief executive officer Jaime Zobel de Ayala and then McDonald’s Philippines CEO George Yang. Now McDo has Yang’s eldest son Kenneth Yang as CEO, while Zobel’s eldest son Jaime Augusto Zobel is also CEO of Ayala Group.
McDonald’s Philippines vice-president for marketing Margot Torres said: “George Yang is a great boss and a dynamic leader.”
Excerpts from the interview:
Philippine Star: Before you became famous with McDonald’s, your family had been in United Insurance. Who started that?
George Yang: It was my immigrant grandfather Yang Wen Ying who started United Insurance, maybe in the 1950s. Before that, he built out as an insurance underwriter, then he started an agency, before establishing United Insurance and later United Life maybe in the 1960s. My late dad Yang Ing Kuong — also nicknamed Charlie — was his eldest son, and I am also our family’s eldest son.
Many top Philippine businessmen are graduates of Wharton School in the University of Pennsylvania, like you.
I studied at Wharton in 1962 for my MBA, graduating in 1964. My batch in Wharton? There’s Vic Puyat of the Puyat clan, Boy Roman…
Is he related to the late Bataan Congressman and banker Pablo Roman, who I heard was close friend to the likes of Tan Yu and Ninoy Aquino?
Yes, his name is Pablo Roman, Jr. Our Wharton batch also included Jun Berba the former Ayala IT head and former Bank of the Philippine Islands president Xavier P. Loinaz. I think I was one semester ahead of Loinaz, and I think we were classmates in a few classes. Younger than me at Wharton also was Joey Cuisia, he was about batch 1967. Of course former Prime Minister Cesar Virata is also a Wharton graduate, I think from the late 1950s.
Why is Wharton well-known as a business school?
It became very famous because it had a very good business program.
What are the secrets to your success?
I’m not really successful, I just work harder. I’m not a taipan. I started McDonald’s in the Philippines in 1981 and I continue to work hard — 30 years already.
Why did you franchise McDo, why not other foreign chains?
McDonald’s is a growth company, it is unique and I’d read about them but had not yet seen one McDo fastfood before in Philadelphia when I was studying in the US. There were not yet many McDo outlets then, but they were moving aggressively in the US and Europe.
I met you several years ago at the wake of my younger sister Marilou’s late father-in-law So Lee Kuy of the former Bataan Cigar & Cigarette Factory, you told me he was your first boss after Wharton, that you earned P1,000 a month and were given a car after Wharton.
Yes, So Lee Kuy offered me a job, that was in 1964 and the car given me was a Toyota Crown.
Philippine National Bank/Asia Brewery boss Lucio Tan and Landmark Department Store’s Enrique Cheng also told me they worked for Bataan before. Did you meet Tan there? Tan told me he was in high school when he worked for his grand-uncle So Lee Kuy for P50 a month.
No, I didn’t meet Lucio Tan, because when I went to Bataan Cigar, he then already started his own factory. I saw him visiting Bataan every now and then; he has many friends there, and eventually they joined his business. Lucio Tan’s right hand man, the late Benito Tan, also came from Bataan.
How did you end up in Bataan Cigar?
One of Mr. So’s partners was my La Salle classmate Tomas Cheng, whose ssfather was Tan Chi.
What was your work at Bataan Cigar?
I was director of marketing for two years. Later on I became industrial partner with Tomas Cheng, and we came out to start a business called Maribesco which was into the marketing of cigarettes.
No factory, just marketing?
We developed our cigarette brands and outsourced the manufacturing with small companies in Malabon. They were cheaper cigarettes than those available in the market.
What were your brands?
Goldman, Kingsman, Richman, Richmen. Later we also had a brand called Richmond.
That’s the name of your second son?
Yes.
How was that business?
We sold mostly in the provinces because we had limited capital. We were doing okay, it was small but a good start. I was the industrial partner.
Was Bataan Cigar big that time? Why did it fade away?
Bataan was then doing very well. It was No. 1 in the Philippines for native cigarettes. Have you heard of their famous ads before, “Bataan Matamis”? When I was still working there, I felt that the machineries needed an upgrade, and expand by looking at foreign brands to market. We needed to keep up with the times because our customer base was growing.
What about your family’s insurance business, you didn’t help there?
I did. In fact, I was buying shares from minority stockholders of United Insurance on the side, that was outside of my dad’s shares. Personally, I became the biggest stockholder. In the 1980s, I became president of United Insurance.
So you’re still active in insurance now?
Not anymore now, I’m not even a member of the board. I sold my shares to my uncle.
What about United Life?
United Insurance owns United Life.
Why did you sell your shares?
I sold it because I wanted a more dynamic business. Two uncles of mine, they’re older, their business philosophy is different from mine, theirs is to preserve and they don’t want to take any risks. However, I still have some shares of United Insurance.
Are you the first McDo franchisee in Asia?
No, I’m not the first, it’s someone from Japan, who got franchise earlier than me. However, the Philippines is one of the top McDonald’s markets in Asia.
How many branches does McDo have in the Philippines?
Three hundred and twenty-five.
What is your target number of branches and what timetable?
We hope to have 500 branches nationwide in five years.
What are your best-performing outlets?
This one here in Greenbelt 1 Makati is one of the better ones. Our other good ones include Greenhills, North Edsa, Alabang is good, also the one in Makati’s Valero Street.
Why is McDonald’s a global success?
The brand of McDonald’s is very successful, because we are consistent in our standards. Whether McDo here or Hong Kong, or other countries, we provide good foods, good service and good ambience. We always renovate. Our service and standards are the best in the quick service restaurant or fastfood industry.
What about your success secrets in business?
I don’t consider myself a success, there are so many others who are bigger. Maybe people think of me as a success because I handle a big brand and a well-known brand. By the way, do you know I’m the only original independent licensee of McDonald’s in Asia? Everybody else sold out, but I did the opposite — I bought the Americans out.
You still run McDo?
Actually, it’s my son Kenneth who is president and CEO of McDo, I’m actually just the chairman.
I heard you’re a stockholder in Andrew Tan’s Megaworld.
I invested a little in Megaworld stocks.
I heard you’re the Philippine licensee or master franchisor of Disney characters?
Yes, we’re the biggest licensee in Asean, nobody knows this except you. Yes, I have a business, which is the biggest licensing company in Asean. It is not publicized, that’s why I’m surprised you know.
How long has this business been in operation?
Over 20 years already. It’s called Fun Characters. My third son Kristopher is handling that, he’s also a Wharton graduate and formerly with Lehman Brothers as investment banker. I started in the Philippines. The original licensees here in the Philippines didn’t do well, so I got them. About eight years ago, Walt Disney was doing licensing on their own, I bought them out all over the Asean region — their licensing for consumer products.
Disney is again a world-famous brand, like McDonald’s.
Yes, they’re good and big. In fact, every time there’s a new Disney movie, they have new characters for licensing. I also am a licensee for Marvel comics characters.
Who are the top three Disney characters popular with consumer products?
Mickey Mouse, Winnie the Pooh and Princess characters. There are other standard ones like Goofy, characters from Disney movies — The Lion King, Shrek, Cars, Little Mermaid..
Who are the top characters in Marvel?
Spider-Man, Iron Man, Incredible Hulk, etc. Iron Man still has old existing contracts, so this is not yet with us.
Your licensing business is interesting.
I also have another such company called Mint Brands, a separate licensing business for Hit entertainment and Cartoon Network characters.
I heard you’ve investments or businesses in real estate too?
Yes, I developed the 27-hectare First Georgetown Vacation Estates in Tagaytay. Now I’ve realty investments in Boracay, Andrew Tan of Megaworld and I are partners in Boracay Newcoast, 30 hectares… I looked for the lot of 10 hectares, then we bought 20 more hectares. Next door to this property is the Fil-Estate properties which Andrew Tan bought when he acquired the company, which has a new name now called GERI. I’m the quiet partner in Boracay Newcoast, and Megaworld is the exclusive seller and marketing.
Why are you close to Megaworld, Emperador Brandy and Resorts World boss Andrew Tan of Alliance Global? Your second son Richmond’s name is in the hotel owned by both of you.
That hotel was our joint venture before… Andrew Tan, he used to be my import broker for our McDonald’s kitchen equipment in 1981.
So you helped Andrew Tan during his early years?
Yes, I helped him out then. He was importing for me, including the toys for our McDonald’s Happy Meals.
I heard you sold many of your Megaworld investments. Are you still close to Andrew Tan?
We’re friends. In fact, he just called today inviting me to have lunch with him, but I have this appointment with you. He’s a minority stockholder in McDonald’s Philippines.
I forgot to ask you what happened to your cigarette venture before, where you were an industrial partner?
There were others like Lucio Tan from Bataan Cigar who went out on their own to put up their own cigarette businesses and factories, but most are now gone. They all eventually lost out in competition to Lucio Tan.
On our cigarette venture — are you old enough to remember the oil crisis of 1973? Martial law here was in 1972. I was then industrial partner with only one-third shareholdings in the cigarette factory. Due to the world oil crisis, our marketing costs went so high up, so I decided to sell my shares to my partner. This venture eventually couldn’t compete with Lucio Tan, but I was lucky I got out and made a little money. I was lucky.
Does Lucio Tan know that your business lost out to his company before?
Yes, Lucio has a sharp memory. Once at a dinner, we were seated around the same table and he amazingly enumerated every cigarette manufacturer, big or small, that are now gone.
Why couldn’t you and the others compete?
Lucio Tan’s scale of operations was so very big, and his marketing was more extensive.
What are the secrets of you and your wife Kristine raising good and obedient children?
I think children see how we as parents do it. We also emphasize education, we gave our children the best education — Kenneth has an MBA from the University of Chicago, Richard studied at University of Santa Clara, the third son Kristopher went to Wharton, and our fourth child Karen went to Stanford University.
Your wife Kristine is also very successful as a top jewelry businesswoman, her eldest sister Dolores Sy Uy of Ever Engraving is also outstanding. Their uncle surnamed So in Zamboanga was once engaged to be married to my late dad’s sister in the pre-war era, she went to study in Xiamen but died before their wedding.
My wife Kristine is hardworking. She has the talent to see beautiful things. She has artistic sensibilities.
Are you part of her business, Kristine Jewelry?
She handles her business on her own. I only give advice. She always tells me her deals. I know a little bit of the jewelry business, but it’s not my line. Before, at one time years ago, I helped set up the factory of Kristine Jewelry and it used to have 50 laborers. That was before McDonald’s Philippines.
Have you met the legendary Ray Kroc, who was the driving force and visionary American capitalist who built up McDonald’s into the world’s biggest fastfood chain?
Yes, I had lunch with Ray Kroc once in the office restaurant of McDonald’s headquarters in Chicago. That was when I was already selected as their Philippine partner.
Your impressions of Ray Kroc?
He’s down-to-earth, a very good businessman.
How much are your targeted sales nationwide this year?
We’re doing very well and we’re continuously growing. Mcdonald’s employs close to 27,000 employees. More than the sales, we at McDonald’s Philippines have set the standards in the quick service restaurant or fastfood industry. We’ve created jobs for students. We have maintained high restaurant service, consistently good food quality and cleanliness.
Your Golden Arches firm which controls McDonald’s Philippines and your own personal name are famous, why don’t you go for an IPO (initial public offering) here or maybe even in Singapore?
That’s a good idea, but not yet. Lots of people were inviting us before. I’ve thought about this option, there are pros and cons about going public. By the way, do you know I’m the only one standing and still the franchisee of McDonald’s in Asia, while the others like those in Taiwan, Malaysia, Singapore, Hong Kong, Thailand all have sold out? I recently got a special award from McDonald’s.
You’re happy with McDonald’s after all these decades?
McDonald’s, to be frank, it’s not the most profitable business to do, but it’s okay. We are proud of what we have done in the Philippines. We have made waiters in our fastfood restos into good service crew, we gave income opportunities for working students in college. We’ve elevated the service staff, plus the cook service, etc. Our waiters are called crew, and they are given opportunities to rise to become managers.
Actor Richard Gomez used to be part of McDonald’s Philippines crew.
Another former McDonald’s Philippines crew member during his school years is BBC host Rico Hizon, he worked as our crew for a few years, I think three or four years. He said he’s very proud and learned a lot having been a McDo crew. He was the emcee in our last party in September this year.
Anything in your life and career you’re most grateful for?
McDonald’s changed my whole life. It gave me a big name.
Advice or success tips for other business people or professionals?
I try to be straight and honest in the way I do my businesses, and I persevere. I was then only a small shot, but was given opportunities and I worked really hard.
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