The Franchisees

Are you pleased with your investment in this franchise?
Yes, I am very please and I enjoy running my franchise.

Has the franchiser lived up to its promises?
Sometimes.

What was your greatest disappointment after getting into his business?
So far I think I have no greatest disappointment.

How effective was the training you received in helping your run the franchise?
The management system is relatively smooth, the staff training program helped me a lot as well to lead the team and run the business.

What are your biggest challenges and problems?
My biggest challenges would be the time management between my other work and family as well as this franchise. I have to work hard to ensure the franchise runs well even without me around all the time.

What is your franchise's cash flow like?
[No answer]

How much money are you making on your investment?
A satisfying amount. (Refused to disclose.)

What do you like most about being a franchisee? Least?
It is a durable business idea and they had a good reputation.

Is there a franchisee advisory council that represents franchisees?
No.

Knowing what you know now, would you buy this franchise again?
Yes. I enjoy running my OLDTOWN franchise.

The Franchiser and the Franchise.

Is the market's population growing, remaining static, or shrinking? Is the demand for your product or service growing, remaining static, or shrinking?

Yes. Nowadays many people like to enjoy and we also provide a good Wi-Fi services to customers.

Is the product or service safe and reputable?

Yes. OLDTOWN's food is definitely safe and reputable. It is a historical cafe that famous with "OLDTOWN White Coffee". I never heard have one customer complaint anything to us.

Is the franchise international, national, regional, or local in scope? Does it involve full-or part-time involvement?

OLDTOWN White Coffee is local, and some of the prosperous places, they will be open 24 hours. We are not 24 hours because less people will come here after 11pm.

How many years has the franchiser been in operation? Does it have a sound reputation for honest dealings with franchisees?

I think is around 10 years. Yes. They have a sound reputation for honest dealings with franchisees.

How many franchise outlets now exist? How many will there be a year from now? How many outlets are company-owned?

I'm not sure on this.

How many franchises have failed? Why?

I'm not sure on this.

How many franchisees have left the system within the past year? What were their reasons for leaving?

[No answer]

What service and assistance will that franchiser provide? What kind of training program does the franchiser offer? How long does it last? What topics does it cover? Does the franchiser offer ongoing assistance and training?
The Initial training fee includes 6 weeks training & accommodation for a maximum of 15 staff. Additional Management staff is chargeable at RM2000 per person and Service staff at RM1500 per person.

Will the franchise perform a location analysis to help you find a suitable site? If so, is there an extra charge for doing so?

The franchisee to identity suitable locations and initial rent negotiations. After that, the franchisor will approve location. On site visit by franchisor is optional.

Will the franchiser offer you exclusive distribution rights for the length of the agreement, or may it sell to other franchises in this area?

Yes. If the franchise wants to open their outlet location they preferred, we will investigate your location and provide you with analysis of its viability for development.

What facilities and equipment are required for the franchise? Who pays for construction? Is there a lease agreement?

The equipments are table, chair and machine, food and so on. We pays for the the construction. Yes, there is a lease agreement.

What is the total cost of the franchise? What are the initial capital requirements? Will the franchiser provide financial assistance? Of what nature? what is the interest rate? Is the franchiser financially sound enough to fulfill all its promises?
Term is 5 years + 5 years (option). Upfront franchise fee of RM80,000 (one-off) and an additional RM10,000 if franchisee exercises option to extend tenure and then 5% royalty fee on the gross revenue derived from monthly sales, and 3% advertising and promotion fees of the gross revenue derived from monthly sales. A typical store will cost around RM700, 000 to fit out, although this may vary according to size of the outlet.

How much is the franchise fee? Exactly what does it cover? Are there any confining fees? What additional fees are there?
Franchise Fees is RM80,000

Initial Training Fees – RM10,000 Renewal Franchise Fees – RM10,000 Relocation Fees – RM10,000

DEPOSIT Security Deposit – RM30,000 Initial Inventory Stock Deposit – RM100,000
ONGOING Royalty Fees – 5% Advertising & Promotion Fees – 3%

Does the franchiser provide an estimate of expenses and income? are they reasonable for your particular area? Are they sufficiently documented?
Yes.

Does the franchiser offer a written contract that covers all the details of the agreement? Have your attorney and your accountant studied its terms and approved it? Do you understand the implications of the contract?
This process should be like that. This is because we need very clearly to know the agreement and so law in this agreement.

What is the length of the franchise agreement? Under what circumstances can it be terminated? If you terminate the contract, what are the costs to you? What are the terms and costs of renewal?
I not clear on it.

Are you allowed to sell your franchise to a third party? Does the franchiser reserve the right to approve the buyer?
Yes, franchisees are allowed to sell their franchise but the buyers has to be approved by the company.

Is there a national advertising program? How is it financed? What media are used? What help is provided for local advertising?
I'm not sure, but I have watch it on TV. I don't know it can provided anything to us or maybe can increase our sales.

Once you open for business, exactly what support will the franchiser offer you?
Use of trade name, use of trade mark, use of Old Town’s franchise business operating system and sales of Old Town’s products and services.

How does the franchise handle complaints from and disputes with franchisees? How well has the system worked?

I didn't received any complaint before.

Question To Ask Current Franchisees

How much does your franchise gross per year? How much does it net? Are the procedures followed to make royalty payments to the franchisee burdensome?
[No answer.]

Are the financial projections of revenues, expenses, and profits that the franchisor provided me accurate in your judgment?
Yes.

Does the franchisor give you enough assistance in operating your business?
The franchisor will assists franchisee to establish local supplies channel. Beside that, we have a series of training programs such as Basic Franchising Course. Franchises also offer important pre-opening support such as site selection, design and construction, financing(in some cases), training and grand opening program.

How many hours, on average, do you work a week?
I'm not sure. Sometimes a once a week come to check and sure they working well.

How often do you get a vacation?
I'm not sure.

Have you been caught off-guard by any unexpected cost or expectations?
No, not really.

Does your franchisor provide ongoing training and support to you?
Yes, they provide job training for the new staffs and for us. The initial training fee includes 6 weeks training & accommodation for a maximum of 15 staffs. Additional Management staff is chargeable at RM2000 per person and Service staff at RM1500 per person.

If you had to do it all over again, would you purchase a franchise in this system? Why or why not?
Yes. It is a good experience for me to run this restaurant and I learnt a lot. I personally like to drink coffee and OLDTOWN White Coffee is the place to slowly sip a cup of coffee while enjoying the ambience.

Yourself
Are you qualified to operate a franchise successfully? Do you have adequate drive, skills, experience, education, patience, and financial capacity? Are you prepared to work hard?
I think I'm not qualified to operate a franchise successfully because I have not enough knowledge and experience about operating a business like franchise.

Are you willing to sacrifice some autonomy in operating a business to own a franchise?
I think I wouldn't sacrifice.

Can you tolerate the financial risk? Would business failure wipe you out financially?
Sure. If I can't handle it anymore, I can sell it to other buyers. This franchise is not my only work so if it fails I still have my other job.

Can you juggle multiple tasks simultaneously and prioritize various projects so that you can accomplish those that are most important?
I think I am able to juggle multiple tasks simultaneously. For my opinion, the best way to handle multiple tasks simultaneously is to prioritize all the projects so I can finish those that are most important. By having a well planning, I believe I can done it on time.

Are you genuinely interested in the product or service you will be selling? Do you enjoy this kind of business? Do you like to sell?
I am not interested with being an OLDTOWN franchisee. I won't consider involving in this business. If I really wan to begin a business, I wish to open a 3D modeling and animation company as compare to OLDOTOWN which doing F&B business.

Do you enjoy working with and managing people? Are you a "team player"?
I'm not very enjoy about it, this is because I am not interested in doing a business. We need to arrange and do well planning when involve in business field, I can't managing too much works as we need to do during business. I am a "team player". I able to working well in a team with well team cooperation.

Will the business generate enough profit to suit you?
Yes. It is a business and it not like you working for others and get a fixed amount salary every months. To start a business or operate a franchise, there will be have risk. A lot opportunity to gain double, triple times income or even more than that is because of this risk.

Has the franchiser investigated your background thoroughly enough to decide if you are qualified to operate the franchise?
Yes. This is a safe protection.

What can this franchiser do for you that you cannot do for yourself?
They gave us a "shop name" that already have it popularity and under already registered under license, Beside that, we can’t add in new dishes into the menu and prices can’t be changed. This few things will be fixed by franchiser.

Question To Ask a Franchisor

What is the background of the company and its performance record?

Old Town at a glance. The group’s history traces back to the incorporation of White Cafe in 1999 when its co-founders, Mr Goh Ching Mun and Mr Tan Say Yap, formulated their own blend of 3-in-1 instant white coffee. The duo commercialized the coffee product that year with the “OLDTOWN” brand name and began exporting it to Singapore the following year. Subsequently, the company diversified into instant milk tea mixes, instant chocolate beverages and roasted coffee powder. In 2005, it decided to expand vertically into the food services industry by opening a chain of cafés encapsulating the traditional Ipoh coffee shop setting and ambience. This expansion into food services has met with success because Old town is today a regional food services company with cafés in Malaysia, Singapore, Indonesia and China.

Beverage manufacturer with extensive cafe network. Old Town’s own manufactured products - the 3-in-1 coffee mixes and instant tea mixes, and “NANYANG” roasted coffee powder - are marketed to the retail segment under the “OLDTOWN” brand name. The beverages in the FMCG business that it produces in-house are sold in more than 7,768 retail outlets in Malaysia, 752 in Singapore, 2,870 retail outlets in Hong Kong, as well as in other countries. Meanwhile, the group’s café outlets under the retail segment operate under the brand name “OLDTOWN WHITE COFFEE” and “OLDTOWN WHITE COFFEE SIGNATURE” for the premium segment, which is a modern version of its original coffee shop in Ipoh. The group has an extensive chain of cafes in Malaysia via 194 outlets as of end Nov 2011, and also operates a few outlets that are open 24/7 in certain areas. This tally includes fully and partially owned outlets, franchise outlets and licensed outlets.

What is the company's current financial status?

Since I am not the account student and not really understanding for the financial part, the things I knew after interview is the financial status between years of 2011 and 2012 the cash and the cash equivalents at end of year is RM79,906,256 so that we can see the financial is getting increase within 1 year time.

What the names, addresses, and phone numbers of existing franchisees in my trade area?

BENTONG  

P23-G & P23AG, Jalan MG2, Pusat Perniagaan Mutiara Gemilang, 28700 Bentong, Pahang.Phone: 09-223 3688Fax: 09-223 3988Business Hours: Mon-Sun 7.00am - 12.00am

Describe how you train and mentor your franchisees.

We will train and mentor our franchisees by provided them the staff training, product, consultation and so on. The most important thing is to let them fully understanding about our product and how we work. Through this, they are able to work by themselves and not too depend on our helps.

If at same point I decide to exit the franchise relationship, how does the exit process work?

As normal, you may need to sign a contract that prove that u are now quit the franchise relationship. Besides, it is depends on the contract you sign to join the franchise, if there is any condition that mention you need to paid any compensate for quit early than as what both party promise in the contract.

In what ways do you work with a franchisee who is struggling?

We will gave them some bonus profit as reward and make them have the movement to do better.

Environment of selected Outlet

Outside of Oldtown White Coffee(Bentong)

Their decoration(1)

Their decoration(2)

Eating and Drinking corner for customers

Eating and Drinking corner for customers

Their menu(front)

Their menu(back)

Oldtown White Coffee-Hazelnut(cold)

OLDTOWN White Coffee Website

You can visit Malaysia's OLDTOWN White Coffee website here : Click here

Company Profile

OLDTOWN’s history can be traced back to the incorporation of White Cafe in 1999, with the intention to provide quality white coffee to Malaysian households and the food services industry, the co-founders and Executive Directors, Mr Goh Ching Mun and Mr Tan Say Yap formulated their own blend of 3-in-1 instant white coffee and commenced manufacturing in 1999.

With more than 10 years of experience in the coffee beverage industry, both our co-founders were instrumental in the growth of the Oldtown Group of companies. They are supported by Mr Lee Siew Heng, our Group Managing Director who played a significant role in implementing the overall vision, strategy and development of the Oldtown Group.

In 1999, they successfully commercialised their instant 3-in-1 coffee mix under the ‘OLDTOWN’ brand name for the retail sector. As at 31 October 2009, our ‘OLDTOWN’ 3-in-1 instant coffee mix was sold in approximately 1,348 retail outlets nationwide in Malaysia, approximately 550 retail outlets in Singapore and approximately 2,100 retail outlets in Hong Kong.

In 2000, they commenced their first export of the ‘OLDTOWN’ brand of 3-in-1 instant coffee mix to Singapore.

In 2001, their subsidiary, White Cafe Marketing commenced operations as the marketing arm for our Group’s beverage products. During the same year, they also expanded our product line to include different variations of our instant coffee mix and have also expanded their export markets to Hong Kong for our instant coffee mix.

In year 2002, White Cafe obtained a HALAL certification from the Islamic Religious Department of Perak for the Group’s beverages. This is part of their Group’s intentions, which is to produce their beverages in accordance with the Islamic law. In the same year, they successfully expanded their nationwide retail distribution of our 3-in-1 instant coffee mix to cover East and West Malaysia through major hypermarkets and supermarkets.

In 2003, they also successfully commercialised their own formulated blend of 3-in-1 instant milk tea for the retail market under the ‘OLDTOWN’ brand name.

In view of expanding their manufacturing activities, they incorporated Gongga Food in 2003 and commenced operations in 2004 manufacturing roasted coffee powder for the food services sector using the Group’s proprietary bean roasting process. They distributed their roasted coffee powder to traditional coffee shops in Ipoh and other states in Malaysia. In addition to the food services sector, their roasted coffee powder is also marketed to the retail sector under the ‘NANYANG’ brand. In 2004, OLDTOWN further penetrated the export markets for their 3-in-1 instant coffee to cover the United States, Canada and United Kingdom and subsequently in 2005, Taiwan and Indonesia.

In 2005, OLDTOWN expanded vertically into the food services sector by opening a chain of cafe outlets based on the traditional Ipoh coffee shop setting and ambience under the ‘OLDTOWN WHITE COFFEE’ brand name. This is part of the Group’s strategy of capitalising and reinforcing on the ‘OLDTOWN WHITE COFFEE’ brand in the food services industry. In the same year, Kopitiam Asia Pacific commenced operations in the licensing, supply of food, beverages and other items, and provision of management services to ‘OLDTOWN WHITE COFFEE’ cafe outlets.

Since the opening of their first ‘OLDTOWN WHITE COFFEE’ cafe outlet in Ipoh in 2005, their chain of cafe outlets have expanded to reach 137 cafe outlets in Malaysia and Singapore as at 31 October 2009. This includes fully and partially owned, and franchised cafe outlets. In 2005 and 2006, They established their subsidiaries namely Old Town Kopitiam, Old Town Kopitiam Butterworth, Old Town Kopitiam Kuala Lumpur, Old Town Kopitiam Cheras, Conneczone to focus on operating cafe outlets in different areas and states within Malaysia.

To support their cafe outlet business operations, OLDTOWN established the following subsidiaries as central food processing centres between 2005 and 2007: -Emperor’s Kitchen commenced operations in 2005; -Esquire Chef commenced operations in 2007; -Dynasty Confectionery commenced operations in 2007.

In 2005, Gongga Food’s business activities also expanded to cater to the procurement of food items for ‘OLDTOWN WHITE COFFEE’ cafe outlets. In the same year, Gongga Food also obtained a HALAL certification from the Islamic Religious Department of Perak for the production of its roasted coffee powder. In the same year, their subsidiary, White Cafe obtained a HACCP certification from BM TRADA Certification Ltd for the processing and manufacturing of beverage products.

In 2006, OLDTOWN expanded our export markets to Japan and China. In the same year, they incorporated Dynasty Kitchen as a distribution centre, which commenced operations in 2007. During this year, they also incorporated Oldtown Berhad, which will focus on investment holding and provision of management services pursuant to its listing on the Main Market of Bursa Securities. Subsequently we also started exporting to Thailand and the Philippines.

In view of their plans to expand their cafe outlet business operations to Singapore, OLDTOWN incorporated Oldtown Singapore in 2007 to provide management services, supply of food and beverage items to cafe outlets in Singapore. OTK Singapore commenced operations in 2008 with the launch of our first ‘OLDTOWN WHITE COFFEE’ cafe outlet in Singapore.

In 2008, their subsidiaries, Dynasty Confectionery and Esquire Chef obtained HALAL certifications from the Islamic Religious Department of Perak for the processing of various food. Their other food processing subsidiary, Emperor’s Kitchen obtained HALAL certification from the IFRC ASIA. To further affirm their adherence to international food safety standards, their subsidiary, White Cafe achieved ISO 22000:2005 certification and ISO 9001:2000 from BM TRADA Certification in 2008 in addition to GMP certification by the Department of Public Health, Ministry of Health Malaysia in the same year. Within 2008, they also expanded their product line to include 3-in-1 instant coffee mix with cane sugar.

In 2009, Gongga Food obtained a HACCP certification from BM TRADA Certification Ltd for the production of roasted coffee powder.