Getting a kick out of the food business

Entrepreneur Michael Ang had just bought a franchise of a Japanese fast-food restaurant and was only months away from opening when he was confronted with the unexpected: the other franchised branches were starting to close down one by one before he could even start operations.

“But I felt that there was no backing out; construction was about to finish and practically everything was set. So I opened our store just the same because I still believed that there was a market for Japanese food,” recalled Ang. During the next five years, they kept the business afloat, gradually increasing their customer base.

However, the closure of the franchise’s other branches had already taken its toll, particularly on the image of the brand. Expansion was not an option for Ang since he was still tied to the franchise agreement. Soon he was back to the negotiating table and struck a deal with the franchiser. He purchased the chain’s commissary equipment and started all over again.

Cooking Up A Storm: Karate Kid Is Born

First, Ang informed the administration of the mall in which the old franchise was located that they intended to open a new restaurant anchored on the same concept of Japanese fast-food but this time under a different name. Next, he closed the store for two months and worked on the concept, changed the interiors, reviewed the product offerings and essentially reorganized the company.

In September 2002, the first Karate Kid Japanese Restaurant opened in Robinsons Place Ermita, the first fast-food restaurant to introduce rice-all-you-can and drink-all-you-can Kido Punch Tea (Karate Kid’s signature drink) in its menu.

 “We chose a name that wasn’t too Japanese and had an easy recall to it,” explained Ang. “We called our restaurant Karate Kid, which was loosely inspired by the ‘80s movie hit top-billed by Ralph Macchio. The name appeals to the young market, which is want we want to tap.”

Karate Kid distinguished itself as a fun place for families and friends to eat out with bright colors, comfortable furniture and a mascot named Kido to highlight the fast-food concept. They also tapped young actor/singer Sam Concepcion to endorse the brand.

Building Brand Equity

A cautious and detail-oriented businessman, Ang opted for the long route of building brand awareness by focusing on his first outlet for two years before opening a second store in SM Fairview.

He made the “rice-all-you-can and drink-all-you-can iced tea” regular fare on the menu, taking into account that Filipinos are a rice-eating people. Karate Kid introduced the Blockbuster (Rice Meals) and Oishi Rap Meals (Rice Meals for 2) served with all the rice you can eat at no extra cost. These dishes are the biggest contributors to the company’s sales.

To keep abreast of industry developments, Ang attends food expositions and trade fairs around Asia. “Constant study and research allow us to be more innovative in coming up with something different,” added Jodee Pineda - Arroyo, the chain’s general manager. “We recently concluded our brand workshop where we gained insight on how the market perceives our restaurant.” Karate Kid has a wide market — those aged 18 to 40 who like good Japanese food that will not burn a hole in their wallets.

New stores will be opened within the year at 168 Mall, Mall of Asia, Prudential Building in Ayala Avenue, Makati, and Enchanted Kingdom. Also on the drawing board is a new Japanese restaurant concept that will complement the image of Karate Kid. It will be a café type of dining experience in which Japanese snacks will be served.

Karate Kid now has 13 branches in and outside of Metro Manila. It recently introduced the Japanalo Meals, three winning combos of Japanese best-sellers for only P89 as part of its sixth anniversary celebration.