Mr. Ma acknowledges that he didn’t set out to own a vast chain of franchised restaurants. “The original idea was to make a living and be able to support my family,” he said. But he realized there was great demand for a variety of food-court choices, and opportunities to franchise his expanding range of brands.
One reason he embraced the franchise concept – only a tiny percentage of the outlets are run directly by MTY – was to open the door for other ambitious newcomers. “I realized that there are many immigrants like myself who were looking for opportunities. If [opening a restaurant]was good for me it should be good for other people,” he said.
Now, it costs about $250,000 to get an MTY franchise, and store owners pay royalties of around 5 to 6 per cent of sales to MTY.
MTY went public in 1995 through a reverse takeover of a shell company in Vancouver, when it had about 70 restaurants. The idea was to be able to tap into investors’ money for expansion, although over the past decade and a half most of its growth has come from its own cash.
Mr. Ma acknowledges that, in hindsight, he could have kept MTY tightly controlled. “We don’t really need money from the public to support MTY,” he said, “[But]I’m comfortable with [being public]now” and he sees no reason to go private. Indeed, to please investors the company recently paid out its first dividends, although it retains enough cash to replenish its war chest for more acquisitions.
MTY has created some of its chains – such as KimChi – from scratch, but much of its growth has come from acquisitions.
Until the Mr. Sub purchase, the biggest buy was the 490-outlet Country Style coffee chain, which MTY bought in 2009 for $16.5-million. It is revitalizing the small Tim Horton’s competitor with renovations, a new menu and brighter design and colours. The big challenge ahead is Mr. Sub, the Ontario-based chain of sub shops that has been around for more than four decades, but has been hit hard in recent years by stiff competition from Subway and Quiznos.
Mr. Ma is loath to give away details of his plans before the $23-million acquisition closes, but he says Mr. Sub’s strong brand is definitely worth revitalizing. One option may be to use the Mr. Sub name within the Country Style stores as the brand for its deli sandwich offerings.
There will be more acquisitions in the future, Mr. Ma says between bites of his Kim Chi noodles, although he takes an opportunistic approach and waits patiently for deals that complement MTY’s current operations or fill in gaps in the product line.
Mr. Ma projects MTY’s network of restaurants will surpass the 2,500 mark within the next couple of years. But with no debts, and the potential to raise funds elsewhere if needed, the company has the ability to make even bigger purchases if it wants to.
He has been cautious about expanding internationally, limiting his global operations to the middle east where MTY has about 100 franchised outlets in Dubai, Bahrain, Saudi Arabia, Qatar and Morocco. The United States is not a priority at the moment, Mr. Ma said, because the regulatory environment and market is very different from Canada. There’s still lots of room for expansion at home, he says.
The consummate promoter, as we finish our lunch he’s keen to get me to sample the wares from one of his most recent purchases. “Would you like a Jugo Juice?” he says. “It’s a healthy drink.”
Curriculum vitae: Stanley Ma
- born in Hong Kong; now 63 years old
- came to Montreal in 1968 as a teenager
- worked at odd jobs until he opened his first restaurant in 1979
- all three of his children work at MTY, two in Montreal and one in Toronto
- brother is a heart surgeon in Montreal
- doesn’t really like to cook
- started with full-service restaurant Le Paradis du Pacifique, in Laval, north of Montreal
- opened first fast-food restaurant, Tiki Ming in 1983
- had about 70 restaurants by the time MTY went public in 1995
MTY brands include: Mr. Sub, Country Style, Thai Express, Yogen Fruz, TCBY, Cultures, Tiki-Ming, Jugo Juice, Vanelli’s, Tandori, KimChi, TacoTime, Sukiyaki, Koya, Sushi Shop, Vieux Duluth, Chick ‘n Chick, Franx Supreme, La Crémière, Valentine, Croissant Plus, O’burger, Panini, Tutti-Frutti, Vie&Nam, Villa Madina, Koryo
- visits Toronto every two weeks to meet with his operations team and tour restaurants
- flies to Western Canada every two months or so to check on Western operations.