Figaro eyes expansion in RP despite downturn

abs-cbnNEWS.com Posted at 02/05/2009 11:37 AM | Updated as of 02/05/2009 1:08 PM Unfazed by the economic downturn, Filipino firm Figaro Coffee Co. is planning to beef up its operations in the country this year. In a statement, the company said it was eyeing to open 10 more stores nationwide. The coffee maker currently has 70 local Figaro branches in its portfolio. Figaro was established in 1993 by a group of seven friends in the Philippines. To date, there are 55 Figaro stores in Metro Manila, two in Baguio City and one in Tagaytay. Other branches are located in key provincial cities such as Davao and Laguna. Figaro has also opened stores in schools such as the Ateneo de Manila University, De La Salle - College of St. Benilde, and the University of the Philippines. The company has also ventured globally, with a store in Shanghai, China.

Chit Juan: Leaving Big Boss role behind

By KAREN FLORES, abs-cbnNEWS.com Posted at 03/04/2009 2:54 AM | Updated as of 04/21/2010 11:14 AM This is the second of our profile stories on the country's movers and shakers in business. In partnership with the Management Association of the Philippines, we hope to portray individuals who have reached a certain level of success, not just by mere luck, but through failures or rejections that helped shape them.

After 15 years since setting up Figaro Coffee Co. and making her mark in the Philippine coffee industry, Pacita "Chit" Juan stepped down as the chief executive officer last June 2008. She considered leaving the company, which she nourished like her own child, to venture into social entrepreneurship as her lifes biggest challenge yet. The timing of events was crucial in making the sudden shift,

saying that things would have turned differently if she thought about it any sooner. She was at a crossroad. She was seeking for and yearning to reach her lifes purposesomething that has evolved since she started her 30-year ascent as a profit-seeking entrepreneur. Her partners expressed that they wanted to try their hand at management. It seemed logical. She still wanted the business to soar but preferred that it wasnt too dependent on her leadership. "The challenge for me is how you transition from being a corporate person talking about business, coffee shops, to actually linking all this. From being just an entrepreneur, you now become a social entrepreneur. So how do you marry business with social impact?" she said. New roles Juan is now a full-time social entrepreneur who focuses on causes ranging from social to environmental. "My advocacy in coffee is in the Philippine Coffee Board. For the environment and a sustainable lifestyle, it's in ECHOstore, and my advocacy to different communities is through my work in the Peace and Equity Foundation," Juan explained. The Environment and Community Hope Organization Store (ECHOstore) at Serendra in Taguig City is a profit venture with a social cause. Commencing operations in September, the retail space markets products from small communities and marginalized sectors and promoting a sustainable lifestyle. It has also evolved into a venue for mentoring programs for those interested in organic and sustainable community-based products. Juan was also appointed as a business sector representative of the Peace and Equity Foundation, a nongovernment organization (NGO) that administers an endowment fund for poverty alleviation. These new roles are a breeze. The entrepreneurial spirit of her family, who has an almost half a century-old automobile parts venture, got her going even at a young age. She bought and sold chocolates and peddled them to her elementary classmates. Not long after, she was creating perforated bags out of scrap metal from their auto parts factory and retailed them in bazaars. With the help of friends, she founded Figaro Coffee Co. in 1993. Making the decision To address supply bottlenecks for Figaro Coffee, she started getting involved in social issues that were holding back the business expansion plans. Alongside her daily business-related duties, she put up Figaro Foundation, the companys social arm, which essentially assured the bean supply for the coffee shops through engagements with local coffee farmers all over the country. The coffee farmers were battling technological, credit, supply, and marketing challenges. Eventually, she helped establish the Philippine Coffee Board, a private-sector group that promotes the country's coffee industry. All these made her reflect: I'm not married, so what is my legacy? It's easy for people who are married or

those who have kids. They'll just teach everything to their kids and hope that the kid will turn out to be a good citizen. But for people like me, how do you impact your world? What can I do next?" Juan said. Her travels and exposure to other women from other countries played a role in finding the answers. From April to August 2008, she attended an Asia-Pacific economic summit in Peru, a womens summit in Hanoi city in Vietnam, and a 3-week program of the US State Department she spent with four other Filipina entrepreneurs from the southern regions. How the women entrepreneurs managed to address social issues through their own ventures while wrestling tough situations and locations, further encouraged Juan that leaving her Big Boss role in the coffee business was worth it. This was like being shown how people are organized so you can spread the word about women empowermentall in an entrepreneurial fashion. It's so beautiful. After those three weeks I thought, I have to replicate, I have to infect more women," she said. Letting go Juan now watches Figaro Coffee from a distance, leaving her partners to chart its destiny. She still holds a 42-percent stake in the company and maintains her seat in the board. She still leads Figaro Foundation. Letting go was initially something she needed to get used to. Whenever she visits restaurants and cafes, for instance, she would point out shortcomings to waiters and managers as if they were her own staff. She found it discomforting at first to repeatedly explain her decision to people who would always come to her to ask for a franchise, or to complain about a certain branch. But Juan said she managed to make the transition because she was more excited about the roles she was transitioning to. As Big Boss, Juan would get up early in the morning for work since she wanted to be first in the office. For each day, she would focus all her energies on strategic planning, making sure that there's growth every year like every business should be. She would go to stores to check on her staff's performance, acting like the noise police if she senses anything wrong. Juan still gets up early, and her schedule is still packed with meetings. But instead of being concerned with numbers, she now looks forward to establishing new relationships and networks for her causes. "Now I use my 30-year experience to make the biggest impact on other people's lives. So it's no longer about economics, but leaving the world a better place than when you found it," Juan concluded.

Ex-Figaro CEO pushes ahead with new coffee chain

By Johanna D. Poblete, BusinessWorld Posted at 06/26/2009 1:19 AM | Updated as of 06/26/2009 1:29 AM MANILA - Figaro Coffee Co., Inc. is going through a crisis of identity with two opposing forces claiming to have a right to the Figaro trademarks, and both refusing to back down from the fight. Exacerbating the rift is the emergence of a new coffee chain, Le Caf Figaro, occupying nine spaces that were once branches of the original company, alongside a new outlet at Fraser Place in Salcedo Village in all totaling 10 coffee shops (some still under renovation). All are operated by a former Figaro franchisee. The tug-of-war started in June 2008 after former Figaro chief executive officer Pacita U. Juan, who owns 42% of F Coffee Holdings Corp., together with business partner Ma. Regina S. Francisco, surrendered management of the coffee chain to the Tanseco family. Just two months after her resignation, she came out with a "notice and warning" in newspapers stating that she owned the Figaro trademarks, including the trade name. Thereafter, she lent the name "Figaro" to the newly registered Le Caf Figaro Enterprises, Inc., where she acts as consultant. Airing her side of the story after a Figaro Coffee officials Wednesday announcement of store and product expansions, Ms. Juan told reporters yesterday she had "stepped down" in good faith, to allow the major shareholders a turn in running Figaro Coffee. Addressing allegations of financial mismanagement as well as profit loss due to the opening of outlets in Dubai, Hong Kong, and Shanghai, Ms. Juan pointed out that Figaro became "the No. 1 biggest local coffee chain" during her 15-year tenure and that any expansion to other countries "is a challenge every time." She said her primary issue with the new Figaro Coffee management is that in December 2008 "new players had come in claiming to have put in money," without prior notice to the minority shareholders. Moreover, she said the new management had decided not to buy stocks from local coffee farmers, making it look like she had turned back on promises made on behalf of the company. Franchisees needs were also not being met, she said, citing Lot Tan, who now operates the 10 Le Caf Figaro coffee shops. The company also withdrew support for the China branch, she added, forcing her and then head of China operations Ross Juan to close the Shanghai branch themselves, or else be "blacklisted" in the country. Ms. Juan, who founded the chain in 1993 with six others, hit Figaro Coffees expansion plans, new franchising agreements, and the recent move to target the "C" market with new food products.

"You need 67% to get something major done, they didnt have that. I did not leave the corporation, I left management [but] I dont know what my 42% is worth now. You love your baby which you have nurtured for 15 years, but you see it going in a new direction that is not the vision that you had for it," she said. "If I had continued the Figaro management from June 2008, the new Figaro would be this," she said, referring to the new Le Caf Figaro chain. "Theres more food, theres still coffee, [but] Im infusing healthier food. So if they say this is unfair competition, whats unfair competition? This is what I would have done if I had the reins of Figaro until today. Figaro [was the] only local company that was kind of going head-on with the international chains but now, that doesnt seem to be the direction," she added. Ms. Juans claim to the name "Figaro" resulted in a counter-measure from majority shareholders who contested her right to the Figaro trademarks in court. An April 14 order by Judge Joselito Villarosa of the Makati Regional Trial Court ruled against Ms. Juan. The order noted that Ms. Juan registered 12 specified trademarks, under her name, during her tenure as director and president of the company under the Figaro group, but that as an "agent" and "trustee" of the corporation "occupies a fiduciary relation to the corporation." Therefore the "Figaro trademarks are treated by law as those of the corporation, being the principal," the ruling stated. It also said Ms. Juan and her allies must "cease and desist from using, passing of as their own, selling, assigning, transferring, disposing or performing any act in connection with the Figaro trademarks." Ms. Juans camp however, claims the court order does not state, specifically, that other parties cannot use the name "Figaro" in conjunction with other words, as in "Le Caf Figaro." F Coffee Holdings Corp., Figaro Coffee Co., Inc., and Figaro Coffee Systems, Inc., are objecting to the use of the Figaro name in any form. Mel Verano, chief executive officer of Figaro Coffee, said in a phone interview that Ms. Juan shouldnt be using the name "Figaro," especially when going into a similar business. Concerning allegations made that his group came in without prior notice to the minority shareholders, Mr. Verano said he and his business partner Gerry Liu have "not bought a single stock," and merely provided financial resources so that the company would continue to operate. He reiterated that his group came in after Ms. Juan had already stepped down, and that the primary reasons were interest in Figaro as a Filipino brand "which can further be developed like other international brands," to protect workers, and save the investment of franchisees and shareholders. Mr. Verano said Figaro Coffee would have collapsed if his group didnt stepped in, as the company was unable to shoulder the expenses of basic supplies.

The Figaro Coffee chain now has 40 franchised stores, and 30 company-owned outlets. For Ms. Juan, however, the old Figaro is dead. "Why did people become enamored of Figaro? Because of what it represents, it represents holistic values, that you can be proudly Pinoy," she said. "Figaro is the one espousing Kape Barako, coffee farming and seed-planting, [the one attempting] to put the Philippines back in the coffee belt. Where is that now?"

Ex-Figaro chief opens new resto chain

By Lala Rimando, abs-cbnNEWS.com/Newsbreak Posted at 07/18/2009 7:15 PM | Updated as of 07/21/2009 12:47 AM Retail chain Figaro Coffee Company is up for another competitionits own founder. Pacita Juan, who established Figaro about 2 decades ago, is supporting a former Figaro franchisee who has decided to cut ties with Figaro, which is now under new management. Juan and her Figaro partners are currently locked in a legal battle for the rights to the trade name, Figaro. Juan relinquished her management post to her partners last year, though she still holds substantial shares in the company itself. Businesswoman Lot Tan, who has about 10 Figaro franchise stores, decided to side with Juan. Tan has formally tapped Juan to source the coffee beans for Tans new concept store chain called Le Bistro. Sourcing coffee beans from rural farmers all over the countryand selling the social responsibility story in Figaros supply chainwas key to marketing Figaro against other coffee chains in the country, Juan used to stress. Le Bistro In a statement to abs-cbnNEWS.com/Newsbreak, Juan said she could not refuse Lot Tans invitation to open yet a new concept in the food and beverage field. Le Bistros new concept targets the middle- to high-end clients. Its a major departure from the Figaros target market. Juan said Figaro is now moving down from its previous target of middle-income clients to those that burger chains also cater to. Le Bistros flagship store is in Fraser Place, a high-end service residence landmark in the Makati business district. Juan said expansion plans for Le Bistro include a new store in NAIA Terminal 3, which is set to open within July or early August.

Juan said Le Bistros concept has been a long time dream. Beyond offering coffee, it also offers light bistro fare. For Chit, Le Bistro has been her dream concept: coffee, light bistro fare, and cocktails for winding down all in one store. I have found the perfect place for coffee during the day, cocktails at night and the [Inter]net or meetings in between, Juan wrote. The stores interiors are in teal and grey to give a modern upscale feel. Wifi access is free. Wine and beer are available. Lot added, This recession has made people want a relaxing drink after work. We offer cocktails at dusk to the same people who come for coffee in the morning.

Figaro investor blames founder for P92M loans

By Lala Rimando, abs-cbnnews.com/Newsbreak Posted at 08/12/2009 3:09 AM | Updated as of 08/12/2009 4:29 PM MANILA - The new management of homegrown coffee chain Figaro blamed the firms founder for some P92 million worth of loans that have choked operations in the past months. In a press conference on Tuesday, acting chief executive officer Crismel Verano said, There are problems with the grant of these loans. He added that they have written the creditor banks to ask for a loan restructuring to allow Figaros cash flow some leeway. Verano showed a demand letter from Banco de Oro dated May 26, 2009. It said that the principal, interest and charges of various loans amounting to P92.66 million are due and demandable. Another P5 million is owed to Metrobank. Some of these loans have already matured late last year, while the interests due to current ones have not been paid. Shining knights?

Verano said his business partners were approached by the Tanseco family, who has 56% stake in Figaro, for help. When Veranos group assumed management of the company in January 2009, he said they prioritized the settlement of some P5 million in weekly payments to suppliers. Around the same time, Figaros franchise holders have been complaining of lack of support from the company in terms of marketing and basic store supplies: sugar, milk, among others. Verano said that his group should be considered as knights in shining armor since they essentially saved a homegrown brand from sinking in the quagmire. Verano considers his group as crisis managers. They invested without due diligence. In previous reports, Veranos partners in Dominos Pizza, another food chain, are also with him in their Figaro venture. They are Gerry Liu and his son Justin Liu. They have sunk in about P50 million for working capital needs of Figaro, and said they are willing to fund [its financial needs] all the way. By Veranos reckoning, Figaro needs about P200 million to financially rehabilitate Figaro. They expect to finally return Figaro in the black in 1.5 to 2 years. Their investments in Figaro now are considered debts or advances, but they said they will convert these in equity stakes when the right time comes. IPO plans In a phone interview with abs-cbnnews.com/Newsbreak, Figaros founder Pacita Juan explained that the loan with Banco de Oro was availed in 2005 as part of plans to list in the stock exchange by 2009. BDO Capital arranged that loan to roll out stores in preparation for our [Initial Public Offering] several years down the road, she said. The plan was to expand the retail chain to a network of 100 stores. At the time, there were about 30 company-owned stores and about 40 franchised ones. Juan said the original amount of the loan was only P60 million, which were used to open 10 more stores. In June 2008, Juan stepped down as Figaros chairman and chief executive, turning over the company's reigns to her partners, the Tansecos. A corporate infighting ensued months after. Then the interest charges on the loan went unpaid and the suppliers had difficulty collecting.

At least 13 franchised stores cut ties with Figaro, further setting back the IPO plans of the company. Juan eventually became a consultant to the new store concept that a former Figaro franchisee put up. No due diligence The twists and turns dont end there, however. During the press conference, Verano vaguely explained that part of their hesitations about paying the loan is because The other owners [Juans group] mortgaged their properties to get their loans. Juan said that since Veranos group did not conduct a due diligence before joining the Tansecos in Figaro, they did not realize that missing the loan payments meant possibly losing 19 stores. In our loan agreement with BDO, we agreed that in case Figaro fails to settle the loan, the bank will be entitled to 19 Figaro stores, Juan stressed. In other words, the right to own 19 stores is part of the collateral with the bank. Juan added that Veranos group learned only after they have already joined the firm that she has the personal copyright to the trademark Figaro and other permutations of the brand. Juan and the Tansecos had been on a bitter legal war over the trademark. A warrant of arrest against Juan was issued last July 27 arising from one of the trademark-related cases. Verano showed this to the media. Juan said a bail bond has been posted and the case is still being contested. She said it involved a particular trademark over one of the Figaro products where a company check worth some P3,000 was used to pay regular trademark fees when she was out of the country. This has long been paid, she said. Juan decried, This is already below the belt. They wanted to issue a warrant of arrest so that the media can feast on me. She said she is considering transferring the trademarks to BDO just to clear my name with BDO. She added that while she still holds a minority 42% stake in Figaro, which she founded in 1993, she had no prior knowledge of the entry of the Verano group. Whatever happened to minority rights? she asked.

http://www.abs-cbnnews.com/business/08/11/09/figaro-investor-blames-founder-p92-mloans

Figaro to open more stores in 2010

The countrys largest Filipino-owned coffee company plans to expand operations this year by opening up one or two outlets each month, or a total of 18 stores before the year ends. Figaro Coffee Co. sets aside a total of P78 million to fund the increase of its 65 coffee shopsin the Philippines. Marketing manager of Figaro Coffee Systems Inc., Ace L. Azarraga, noted that each store has an estimated cost of P6.5 million. They have just opened two stores recently, one in DBP Makati and the other in Dasmarinas, Cavite. Figaro Coffee Company is now keeping a critical eye on expanding in our home-market, which will focus mostly on business districts around the country as we want more and more people to experience our local barako coffee, Azarraga said. The DBP Makati branch is a full store carrying their complete line-up of coffee drinks, breakfast, pasta, pizza, all day breakfast, ala carte, sandwhiches and pastries. The store is located at the ground floor of DBP building, Sen. Gil Puyat Ave., cor. Makati Ave., Makati City., which is perfect for business and casual meetings. Figaros expansion program is in line with its tradition to continue serving the finest native barako coffee in the country by opening more outlets. As we continue to expand, more and more Filipino coffee farmers are benefited. Figaro Coffee Company only buys localcoffee beans, Azarraga said. Of the 65 Figaro branches nationwide, most of which are in Luzon, 35 are franchise-owned and 30 are company-owned. Figaro was established in 1993 and is a 100-percent Filipino-owned company whose product lines include specialty roasted local coffee varieties and various coffee-related paraphernalia.

http://money.roysville.com/2010/06/26/figaro-to-open-more-stores-in-2010/
June 26, 2010 Roy No Comments

Tags: Business, coffee, coffee shops, entrepreneur, expansion, Figaro, Filipinoowned,investments, Philippines Posted in: Announcement, Corporations, economy, Employment,entrepreneur, i nvestments, marketing, Philippine business news, Philippines, Products

Taking the Filipino name overseas

BY RUELLE ALBERT D. CASTRO
ONE more Filipino company, this time in the coffee shop business, is planning to invade rich markets abroad. Figaro Coffee Co. is set to open stores in Singapore, Saudi Arabia, and Papua New as it continues to seek the best locations abroad. Crismel Verano, Figaro CEO, said the company is ready to ship Philippine-grown beans to Papua New Guinea after signing the franchise agreement. Strangely, coffee processors in the Philippines are importing beans mostly from Vietnam. Coffee bean production is estimated to be just about half of total demand. However, a private group is reviving the old glory of the Philippines as a competitor of Brazil in the 18th century. "We have just signed the contract for Saudi Arabia, and in Singapore we are in the process of identifying the location," said Verano. The new stores bring the companys overseas presence to four after opening the first overseas branch early this year. This will also bring Figaros total stores to 70. "Locally we have more than 12 stores opened this year," said Verano. Figaro is steadily joining the ranks of companies like Jollibee Foods Corp. whose portfolio of fast-food outlets continues to become a common fast-food fixture in many countries, particularly in Asia. Tony Tancaktiong, Jollibee chairman, previously declared that it the companys intention to become Asias No.1 fast-food chain.

Tancaktiong also said that Jollibee sees a 50:50 contribution to profit from local and international operations in three years time. The Philippines has a yearly demand for coffee of 65,000 metric tons. It is growing 5 percent yearly with local production limited to 30,000 tons. Verano said demand has the potential to grow 14 to 15 percent as the drinking population is expanding very fast. Verano said the Figaro could hit revenue if P450 million this year, a 30 to 35 percent growth from last year. Verano said Figaro is committed to taking the Philippines coffee where it is possible. "Since we are a Filipino company, we want people to taste what a quality Filipino coffee is," he said. Figaro offers three kinds of stores full store with a kitchen that offers the complete product offering, kiosk; and cart. About 65 percent of the stores are franchised. Figaro is targeting the opening next year of 25 stores locally and six to seven overseas.

http://www.malaya.com.ph/oct24/busi4.html