Case Study: Max’s Restaurant

I. COMPANY OVERVIEW

Franchise Name: Aguillon Ventures, Inc.

Brand & Trademark: Max’s Restaurant

Max's Restaurant's beginnings started in 1945, after World War II. Maximo Gimenez, a Stanford - educated
teacher who opened up a cafe where the American occupation troops stationed at Quezon City could
enjoy food and drinks.

The cafe initially served chicken, steak and drinks. Maximo's niece, Ruby, who managed the kitchen,
created a special recipe for chicken that became an instant favorite for the GIs. Soon, the Filipino public
heard about the delicious chicken-tender, juicy and crispy-and the locals began patronizing the
establishment. Encouraged by her mother to expand the menu and serve more Filipino food, Ruby set up
the Baclaran branch along Roxas Boulevard in Parañaque. They decided to name the restaurant “Max’s”
after Maximo.

Over the years, Max's Restaurant's popularity grew and it became known as "the house that fried chicken
built." It has expanded in Metro Manila, Southern and Northern Luzon, Cebu, and to California and other
places in the United States. It has also expanded to Canada. It will soon open restaurants in other countries
as well.

II. BUSINESS DESCRIPTION

Max’s Restaurant is a Philippine-based restaurant serving fried chicken and Filipino dishes. What started
out as a small café in the Philippines has successfully transitioned into a proud Filipino tradition that is
also making waves in the global front as an international brand. Today, “the house that fried chicken build”
has expanded to 123 local and 10 international branches. Max’s is more than just a food brand. The recipes
have been intricately developed for 66 year and given a modern twist to cater to the increasingly
discriminating tastes of customers all over the world.

SITE/LOCATION: Max’s Restaurant currently has over 127 branches in the Philippines. The chain also has
branches in US states of California, Hawaii, and New Jersey, and its first Canadian branch in Toronto,
Ontario. A store opened in Vancouver, British Columbia in March 2012. More branches will open soon in
Sydney, Australia, Dubai, UAE, and Queens, New York.

PRODUCT & SERVICES: Its signature dish is its fried chicken – Max’s dubs itself “the house that fried
chicken built.” It’s often served with rice and/or kamote (sweet potato) fries. Other items on Max’s menu
are Filipino dishes like pancit, kare-kare, nilagang baka, sinigang na baboy, lechon kawali, pork adobo,
bicol express, and crispy pata among others. Service is generally good, but the usually high volume of
customer traffic at its mall locations doesn’t lead to the cleanest or most relaxing environments at those
branches. Max’s is a casual dining restaurant leaning more towards fast food rather than fine dining. Pre-
packaged caramel bars accompanying some meals and Max’s bakery kiosks at some restaurants drive the
point home. Some services: takes reservations, walk-ins welcome, good for groups, good for kids, take-
out, delivery, catering, waiter service, outdoor seating.
 III. Business Analysis

The chain has a strong company culture based on treating, not only, their guests but also, their employees
with respect and appreciation. Historically, they have offered full benefit packages to their employees
such as meal discounts, paid vacations, profit sharing, 401K plans, health, life, dental, and vision insurance.
In order to stay competitive with the industry they have continually benchmarked the competitions’
benefits and have added benefits over the years such as flexible spending accounts and paid time off
banks. Max’s has done a great job revaluating their benefit package every few years.

Max’s, also, has a strong employee development program. This program allows Max’s to hire employees
with little or no skills at a minimum starting cost which implements a market lag pay philosophy. In
addition, they focus on building personal relationships with employees and supporting them in times of
crisis, thus building employee engagement and retention.

In addition, Max’s values the communities in which they serve. They give back to each of the communities
in which they conduct business. Not only do they donate money, but they also donate their time by
running a very successful employee volunteer program.

IV. SWOT Analysis

Max’s is financially strong but recently sales have been declining. They realize that the nationwide family
style restaurant segment has been losing market share to fast casual restaurants. The marketing reports
indicate that this will not change in the near future. Another national concern is that labor unions are
growing in the restaurant industry. Labor unions decrease profits and make doing business more complex.
In addition, because of the size of a full service restaurant the initial capital investment needed is large. A
larger investment needs a higher sales volume to achieve an acceptable rate of return on the investment.
With their decreasing sales, Max’s cannot project the return on investment that is financially acceptable.

The SWOT analysis first identifies the strengths and weaknesses of the internal environment.

 Strength: An area of demonstrated competency and proven performance. Or, slack resources
(excess capacity) with potential for mobilization or reallocation
 Weakness: An area of demonstrated incompetence, mediocrity, or lack of distinctive achievement.
Alternatively, limits on resources that prevent them from being mobilized.

The SWOT analysis then addresses threats and opportunities posed by the external environment (such as
mortgage rates, changing demographic composition, public policies, labor force, employment and
unemployment):

• Threat: An area that poses an obstacle; something that must be overcome.

• Opportunity: A possibility due to favorable circumstances; an area that provides an edge.
 Strengths
 Casual fine dining
 Positive brand image
 Advertisements
 Large target market
 Locally adapted food menus
 High quality guarantee/customer
satisfaction
 Great ambience
 Excellent customer service
 strong employee development
program
 Promos
Opportunities
 Franchise
 Careers
 Take out/Delivery
 Functions and events catering
 Expansion abroad
 Healthy lifestyle
 Community relations and
involvement
 Local culture and tradition
 Holidays and occasions
V. CONCLUSION
Weaknesses
 Price
 Lack of product innovation
 Customer traffic
(congested/crowded)
 Waste disposal
 Awareness
 Preparation time
 Adjustment period
Threats
 Growth of fast food chains
 Changing customer taste
preference
 Similar business concept and
service from other competitors
 External changes (government
taxes, etc.)
 Influences of foreign countries
 Sanitary standards
 Labor unions