BreadTalk: Managing Expansion Through Franchising

By Foo See Liang & Chung Sang Pok

Abstract

When BreadTalk made its debut on the Singapore stock exchange in late 2002, George Quek, the founder and managing director of the bakery chain, was assessing the opportunities and the risks facing the company. BreadTalk had made progress in establishing its brand name and expanding into emerging markets like China and Indonesia.

In a short span of three years, the bakery chain opened more than 20 outlets in Singapore, making it one of the most recognised local brand names. With its signature 'open concept' kitchen, the business presented its products in attractive packages embodying novelty, creativity and fun. When the BreadTalk concept was first introduced in Singapore, its critics were sceptical of its long-term prospects and predicted that the fad would fizzle out just like the 'bubble tea' phenomenon.

Not only had BreadTalk mushroomed all over Singapore, its first franchise outlet in Jakarta was also well-received. In a move to diversify its business, the company brought in a famous Taiwanese dumpling restaurant to Singapore through a franchise agreement. As its business growth gained momentum, the company sought to assess the risks associated with its 'growth by franchising' model in the overseas markets.

Issues: Entrepreneurship, Franchising, Financial Risk

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