Leaders of Central America

Periódico Moneda, 2005


Central American Leaders

We present the special edition on outstanding leaders of Central America, including interesting interviews with successful entrepreneurs who share with readers of Moneda their success story, their experiences and valuable advice. See special edition.

JUAN JOSÉ GUTIÉRREZ “BY APPEARING ON THE COVER OF NEWSWEEK, REPRESENTED THE EFFORT OF 7 THOUSAND PEOPLE WHO MAKE UP THE CAMPERO FAMILY”

 By Jorge Carpio Arrivillaga

JCA: Could you tell us how you got started in Pollo Campero?

J.J Gutiérrez: I was 23 years old in 1982, I came from the group’s meat industry. In May of that year, I took over Campero. At that time there were fourteen Campero stores in Guatemala and five in El Salvador; that was Campero, in reality they were cafeterias, they were not restaurants and they were seen by us in the production line, as one more window to sell chicken directly to the end consumer, without struggling with intermediaries. As poultry industrialists, those cafeterias were just that, they were part of the production chain, with a very reduced menu.

It was at the beginning of the eighties that we began to understand and know the business better and, in doing so, we sought to change our own mindset; we told ourselves that this was no longer a part of the production line, that it was no longer a group of coffee shops. What it really was: a service company, a restaurant chain.

As easy as it sounds, it took us a lot of work to convince ourselves and build this culture before we measured ourselves based on the number of chickens that we sold. Today, the total of transactions, the average ticket and other factors, tell us what the business is like.

When we started the cultural change in 1986, in a quixotic move, we decided to open our first restaurant in the United States. We realized that we had to continue growing, but our countries were in turmoil, violence was extreme, rules of the game were not clear. We said ‘We need income in dollars’, and we decided to go to the United States.

In 1986, I opened a Campero restaurant in Miami, in Coral Way. We operated it for a year and, although we closed it and, although I felt frustrated, it was a great learning experience, like never before, of what it really takes to develop and grow a chain like Campero internationally.

JCA: What have been your greatest achievements?

J.J. Gutiérrez: To make Campero a system of restaurants with manuals, with systems, with procedures and the most important achievement is having converted the restaurant chain, making it transferable, achieving the export of the concept. This is perhaps the most relevant achievement.

On the other hand, over the years, I know it is important to have built a team of first-rate professionals, totally committed to the brand, to the company, and to making this small chain a concept that can be exported to the whole world; that it was not easy to make it transferable to different countries, because its origin is in Americanized fried chicken ideas. Initially we brought an idea of ​​an American concept, then we tropicalized it, we put it together, later, we redesigned it and now, we are sending it back, strengthened.

JCA: What have been the most difficult moments you have had in the company?

J.J. Gutiérrez: In a company like this, the most difficult thing is when you start to make changes and, in parallel, they begin to grow. This causes the loss of valuable people. I call it the growth syndrome, and the cost is to lose people that are very dear, very old friends. They have been difficult times, I would call it the sacrifice, the growth.

JCA: Tell us how you started the expansion of Campero in the Central American region?

J.J. Gutiérrez: When I returned from Miami, from what I consider to be my university, I began to work on the transformation of Campero and that is how, in 1990, we were able to consolidate a good part of the process. Upon my return we began an important expansion process in the Central American region.

Since 1988, we have maintained a growth rate of ten restaurants per year, growing significantly in El Salvador and Guatemala. In the mid-nineties, we managed to consolidate the first phase of the transformation and prepared to make the concept transferrable. Thus, in the second five-year period of the nineties, we started our franchise project, operating under this scheme in Panama, Nicaragua, Costa Rica and Ecuador. In all these markets we continue to work with franchises. In Costa Rica we bought 51% of the shares, although it is still operated as a franchise.

What was valuable about this period was the change in culture experienced by us, as we went from managing a group of our own restaurants to a group of restaurants belonging to others. This involves radical changes. We started and learned to deal with the world of franchises, a whole system of standards, where quick response is vital: “Delivery”.

After this franchise learning process, in 2002 the first Pollo Campero was opened in Los Angeles, which has been a success. Since then, to date, a lot has happened but, in short, in that first restaurant, we sold a million dollars in forty-seven days and, with this, we broke the record in the United States. But a few months later, we sold the same million dollars, in Washington in just 31 days, breaking our own record.

JCA: How many restaurants does Campero currently have?

J.J. Gutiérrez: Today Campero is a restaurant chain with 196 restaurants in 9 countries and 22 of these restaurants are already in the United States in five of the most important cities: Los Angeles, Washington, Dallas, Houston and Nueva York, all operating with great success thanks to God. The next step is Chicago, where we open the first Campero next month. We closed 2005 with thirty stores in the United States, because in all these cities there are restaurants in the process of construction.

JCA: How are you assigning franchises: by region, by city, by country and what new franchises are there?

J.J. Gutiérrez: In 2006 we plan to sell more territory to more franchisees. Our targets are the North American States of Massachusetts, Georgia, Colorado and Florida, but to answer your question, the franchises have been assigned differently, in some cases, such as in California, it was assigned to the West Coast of this important state. California can sub-franchise, to third parties; franchises have been sold for states, but also for cities. In Florida we will open in Miami. This is already a strong return; the first Pollo Campero restaurant will be located on Calle Ocho and Flagler.

JCA: Could you expand on the franchise system and your decision to grow under this platform?

J.J. Gutiérrez: The idea of ​​franchises gives us the possibility of growing very quickly without diverting resources. This business has gained “momentum”. The speed at which it can be done with your own capital and human capital is fifteen times less than how I am doing it through franchises. With this, we seek to reach the critical mass as I am doing, to achieve geographic coverage at the same scope of time. It is also a strategic approach, because ‘cattle fatten under the eye of the master’. It would be materially impossible for me to control both countries and restaurants, so it is preferable that different franchisees, owners of each restaurant, do it. The franchise business allows you to grow quickly and simultaneously, but you have to establish a very effective system of standards.

JCA: Apart from the United States, what projects do you plan to develop and which countries have shown interest in the Pollo Campero franchises?

J.J. Gutiérrez: We have important projects to develop in Mexico where we are going strongly in 2006. The Dominican Republic is a market we are going this year; it is an island where the family has other businesses and this makes it easier, because the structure helps.

JCA: We have heard about an important expansion initiative in China. Could you tell us what plans you have in that Asian country?

J.J. Gutiérrez: As a result of our arrival in the United States, our success has generated a lot of very favorable news. The situation that has been created around Campero, which they call the “Campero phenomenon” in the United States and with this country having a multicultural population, from African Americans, Latinos and Asian communities, franchisees in several cities are seriously thinking about opening Campero restaurants in the China towns of American cities, because the Campero flavor has been well liked by these communities.

If we talk about globalization, nothing is more globalized than the media.  If something happens in a country, it is known throughout the world as news travel immediately. This has aroused a lot of interest in businessmen from several countries. We have received here in Guatemala, where our parent company is located, delegates interested in taking the Campero concept to their countries, including mainland China.

JCA: Isn’t it scary to enter such a different and distant market?

J.J. Gutiérrez: What would scare me is to not do it, not to take advantage of the opportunity that has opened to us. We Central Americans believe that opportunities come only once. I would be more afraid not to make the decision whether or not to go to the Chinese market. If something goes wrong, I prefer to get off the bus halfway, but never not to get on.

We currently have preliminary agreements for China and Indonesia, consolidated with important groups of these countries. We have divided our development in China into two regions; the first one includes four provinces and region 2 covers six provinces. We have concentrated our development in eleven provinces.

Phase one is four provinces and includes major cities such as Shanghai, Beijing, Guangzhou, with ambitious development programs that include fifty restaurants. There will be five hundred restaurants in China alone; we will start in the city of Shanghai in December 2005. We will operate similarly to here, with table service, which is highly valued in China. This will be the first restaurant and in parallel we have another pre-agreement for fifty restaurants in Indonesia. The opening of the first store is scheduled for February or March 2006 in the capital city of Jakarta.

JCA: How have you prepared for this great expansion in continents as far away as Asia?

J.J. Gutiérrez: We are dedicated to polishing our franchise program, which includes changes in the organization.  We had a department, never as important as now. We are also constantly developing new products with chefs who are cooking every day, who try new sauces, new flavors, new combinations, plus products that we have already launched. In Guatemala, six new green salads will be available very soon, which were already launched in the United States. These salads range from the typical green salad, all the way to an oriental salad, a Mexican salad. They will soon be available in the rest of Central America.

JCA: I remember the early Pollo Campero, with their small cafeterias, which were very innovative at the time, but today it is something very different. What recent improvements have you made to the stores, and, above all, what changes have you introduced in the concept of the restaurant?

J.J. Gutiérrez: We have reinvented the concept of Campero several times and the last one was six months ago. We are transforming several restaurants, starting in Guatemala with eight and, in El Salvador, with ten. In the next twenty-four months, the chain will be transformed. It is a total architectural change, a much more comfortable and modern setting, especially in indoors. This has allowed a growth of between 12 to 15 percent in new consumers. We have managed to attract a larger number of customers. There are restaurants with wireless Internet service. All the new stores have the new layout, and we are gradually transforming the existing stores. We believe that it will be the layout used in the next six years.

JCA: Recently, the important magazine Newsweek published an article on ten outstanding businessmen and placed your photograph on the cover. This is a great distinction for you and for Guatemala. What do you think about it?

J.J. Gutiérrez: For me it is like a trophy. The article is called ‘Ten great thinkers for ten great businesses. In the article they say that Pollo Campero is the most ambitious international chain of restaurants from a large or small Latin American country. Newsweek did its job, for me it is a recognition of our efforts, I am the first Central American to appear on the cover of this magazine, which is very significant.

Cover of the Newsweek magazine portraying Juan José Gutiérrez; a great distinction for Guatemala.

“This business has gained “momentum”. The speed with which it can be done with your own equity and human capital is fifteen times less than how I am doing it through franchises”.

The Financial newspaper of Central America


Periódico Moneda 2005