As told by George T. Yang: lessons from a business tycoon

“… the beginnings of McDonald’s here in the Philippines was a struggle, mentally and physically. It was not a bed of roses. But McDonald’s is McDonald’s: it’s good and fun.”

WORDS MICHELLE ANN P. SOLIMAN | ILLUSTRATION TONE DAÑAS

George T. Yang celebrated his 80th birthday in McDonald’s, naturally. Left on his own to order for the crowd of crew members and friends who gathered in the Greenbelt 1 branch to fete him, the founder of Golden Arches Development Corporation would have probably chosen a mix of his favorites: Filet-O-Fish sandwiches, Quarter Pounder hamburgers, and Chicken McDo meals with rice and fries. This would have triggered a flurry of activity that we take for granted after 37 years of quick service.

It was Mr. Yang who popularized fast food cuisine in the Philippines when he opened the first McDonald’s restaurant in Morayta, Manila, in 1981. It’s still there in its original location, if you fancy a visit. Growing the business from that single franchise to 600 branches nationwide and close to 60,000 employees was a long slog.

Ubiquitous as the Golden Arches are now, Mr. Yang remembers a time when it was a novelty rather than the norm. “At that time, the model of serving good food fast was new to the Philippine market and I knew it would be a hit,” he said, referring to the 1970s to the early 1980s.

In 1974, Mr. Yang wrote to McDonald’s headquarters in the US, expressing interest in opening a local franchise. It took seven years of back and forth with American executives, who initially declined Mr. Yang’s request. Despite that first refusal, he persisted and managed to finagle a meeting with McDonald’s decision-makers, who flew to the Philippines to meet with the thirty-something entrepreneur hell-bent on bringing the Golden Arches to Manila.

While top brass was deliberating, Mr. Yang trained as a McDonald’s staff member in Hong Kong. He prepared and served food, bussed tables and cleaned the restroom, and graduated to managing the restaurant. Every McDonald’s branch operates on a model ultimately based on the Speedee Service System developed in the 1940s by Richard and Maurice McDonald, the brothers who revolutionized the way we eat by applying an assembly line-like discipline to food preparation and standardization. In The Founder (2016), the biographical movie that tells the origin story of McDonald’s, the system is described as a “crazy burger ballet” and a “symphony of efficiency” where there is “not a wasted motion.”

“The time I spent in Hong Kong working at the restaurant as part of the crew was very valuable,” said Mr. Yang. “I learned the ropes firsthand and it prepared me for the work that needed to be done when I opened the first store. I believe that in doing business, you need to know it inside out.”

September 10, 1981, is a day etched in Mr. Yang’s memory. After the long wait, the Morayta branch of McDonald’s, right in front of Far Eastern University, finally opened and served its first hamburgers to a line of customers that snaked outside the little store, spilled onto the streets, and around the block. “That day is unforgettable. … A lot of people came,” said Mr. Yang. And these people, curious of palate and patient of demeanor, waited to be let in since Mr. Yang had to close the store when it reached capacity. Diners came in batches.

It was a real test for the crew who, prior to opening day, trained with simulated ingredients: cardboard cutouts for beef patties and straws for french fries. “When we opened, nobody had real experience. It was very chaotic but fun,” he said, remembering further mishaps. At one point, power went out and when it came back on, the exhaust was blowing the wrong way. “My heart almost stopped,” said Mr. Yang, who had to call maintenance to fix the problem.

That glorious first day, power outage aside, predicted McDonald’s success. Mr. Yang opened his second branch, also in 1981, in Cubao at the New Frontier Theater. It was here in “Store #002” — which reopened in 2015 as McDonald’s Kia Theatre — that Mr. Yang’s eldest child, Kenneth, worked as part of the crew (he’s the current president and CEO of Golden Arches). It expanded nationwide in 1992 with branches in Cebu and Cagayan de Oro. In 2005, the company concluded its deal with US management and became 100% Filipino-owned. It led to the acceleration of opening new stores, with an average of 50 stores opening yearly.

The Philippine menu, too, has changed since 1981. McDonald’s has always been sensitive to the gustatory peculiarities of its worldwide following — the Philippines, after all, is only one in around 120 countries and territories with McDonald’s restaurants. Germany has the McNürnburger, three pieces of bratwurst on a bun; Colombia has the Pineapple Oreo McFlurry; the Philippines has the Chicken McDo with Spaghetti value meal. It’s still one of the top-sellers here but it flopped when it was offered in the US and consequently pulled.

Despite failing to introduce a menu item to the international menu, McDonald’s Philippines is a booming billion-peso business. According to data compiled by BusinessWorld Research, Golden Arches Development Corporation finished 2017 with Php24.757 billion in gross sales, garnering the 98th spot in BusinessWorld’s Top 1000 Corporations in the Philippines. In comparison, Jollibee Foods Corporation, McDonald’s direct competitor, is ranked 27th with Php62.425 in gross revenues.

NO BED OF ROSES
Mr. Yang embarked on his McDonald’s journey after realizing that he could not compete with his peers from De La Salle University in an organizational setting. “I’m shy. I don’t like to talk to people,” said Mr. Yang. This confession might ring false to anyone who knows of Mr. Yang’s avocations: he’s an avid fan of classical music who has performed on stage many times, treating audiences to his interpretations of “O Sole Mio,” “Torna A Surriento,” and “Nessun Dorma.”

Still, he insists on his shyness. When he ran for vice-president and failed to be elected despite being on top of his class, he vowed to go it alone. “That told me something: I need to do things myself. At that time, I felt I could not shine in an organization, so I thought I had to do my own business,” he said. “I was young then, when I started McDonald’s. I have seen it grow.”

He added that McDonald’s has served as a stepping stone for a great number of people who eventually moved on to other things. “It’s really meant to be that way. Many of them have succeeded. I’m proud to say that many of them consider their experience in McDonald’s as very helpful in their careers,” he said. It is an achievement close to his heart: McDonald’s pioneered providing regular and part-time jobs for students in the industry. “We have never practiced contractualization in our restaurants. The employment opportunities we have given to working students have enabled them to finish their studies and jumpstart their careers,” he said, taking a gentle jab at Jollibee, which landed in the news this year for topping the Department of Labor and Employment’s list of labor-only contracting companies — a practice prohibited by the current administration. “I always meet people who would introduce themselves as former McDonald’s crew members and are now big shots. They credit working at McDonald’s not only for helping them finance their studies but for the training and discipline they learned. It makes me very happy to hear stories like these,” said Mr. Yang in a subsequent e-mail to High Life.

Even if he is no longer involved in the day-to-day running of the company, Mr. Yang puts in his two cents when it comes to setting the company’s vision. “You know I felt like I did not do enough. All of a sudden, you wake up and think, ‘I’m already seventy-plus! Where did all the years go?’ You will feel that. Do I want to accomplish more? I want to, but realistically speaking, I should not because I don’t have that kind of energy anymore,” he said. “But once you are a businessman, you cannot help it—your mind is still working. My mind is working. So, I try to give my ideas to my children. It’s up to them to do it if they want to.”

In a moment of introspection, Mr. Yang laid out the personal cost of building the McDonald’s empire and spreading the glow of the Golden Arches throughout the Philippines: “Sometimes, I felt I spent too much time at McDonald’s. It required so much of my attention, that I couldn’t do other things. I didn’t want to fail. It’s a matter of pride. I would say that the beginnings of McDonald’s here in the Philippines was a struggle, mentally and physically. It was not a bed of roses. But McDonald’s is McDonald’s: it’s good and fun.”

If he could talk to his younger self—that shy, people-averse George he remembers fondly—he’d tell him two things: “It is okay to make mistakes, only if you learn from them” and “if you persevere enough, you succeed. If you work hard enough, you succeed—perseverance and determination. If you persevere hard enough, the day will come for you,” he said.