Toronto-based Manchu Wok polishes marketing tactics for move into states

Nation's Restaurant News, Nov 18, 1991 by Peter O. Keegan

Toronto-based Manchu Wok polishes marketing tactics for move into states

MARKHAM, Ontario -- Manchu Wok, the 214-unit division of Toronto-based Scott's Hospitality, is revamping units, polishing its image, sharpening its marketing angle and gearing up for an expansion push into U.S. markets.

After joining the chain in May 1990, Manchu Wok president John Tobin began to reposition the concept and improve operations, aiming to establish the concept as a well-known brand in the fragmented and diverse Chinese quick-serve market.

"Chinese is one of the last segments of the food industry that haven't been organized," Tobin pointed out. "Pillsbury tried it [with Quik Wok], and General Mills is still testing it [with China Coast]. None of the Chinese chains really has a national recognition or great degree of brand recognition."

After lasty year's acquisition of the London-based Wimpy's Perfect Pizza chain from Burger King parent Grand Metropolitan PLC, Scott's reorganized its food groups into two divisions: one consisting of concepts it franchises, the other consisting of franchised units of other chains. Perfect Pizza, as Wimpy's is now known, and Manchu Wok are in the franchisor category. Scott's franchises from Wendy's; Tim Horton Donuts, Holiday Inn and Mr. Submarine form the other group.

Tobin then reorganized the lines of command for North America, making one vice president in charge of both countries, instead of having one in the United States and another in Canada. Manchu Wok sold approximately $90 million worth of Chinese food last year in the two nations.

"In May we put together a strategic development plan for the company," Tobin explained. "Scott's is looking to Manchu Wok as their future. They like the idea of being a franchisor where they own the brand and control their destiny."

Tobin said Manchu Wok is seeking to grow in the United States because its economy is much better than Canada's. The chain currently has 100 units in the United States.

According to Tobin, Manchu Wok's per-store sales in the United States are up 8 percent, ranging from $360,000 to $365,000 at food court units and more than double that figure at new in-line mall units. The in-line outlets range in size from 1,400 square feet to 2,000 square feet, compared with the 500-to 700-square-foot-size of food court units.

"We just opened up our first in-line concept in Stamford Town Center [Stamford, Conn.]," Tobin said. "You take a food court-type unit, put it on an angle and add some tables and chairs. But it's still self-serve."

Manchu Wok, which was launched in 1980 by a Chinese dentist in Canada, features a variety of menu specialties for under $5, including lo mein, soups, fried rice, chow mein and daily specialties from the four regions of China: Canton, Szechuan, Hunan and Mandarin.

The chain was very fragmented when Scott's bought it in 1989 from founder Jack Lew, with 55 units scattered in 22 states across the United States and 73 strewn throughout Canada. "They expanded into the U.S. with no rhyme or reason," Tobin remarked.

In addition to adding new sites, the chain has attempted to update the concept and standardize some of its features. For instance, it recently increased the meat content in its dishes by 70 percent after doing consumer research.

Everything is made fresh on the premises, and four daily specials are offered in addition to the regular menu selections. Average checks run about $4.50 in Canada and $4 in the United States.

Manchu Wok now illuminates its menu boards and has added Chinese writing to lend an ambience of authenticity as well to aid the many Chinese immigrants who work and eat there.

The look of the restaurant was updated to make it look more authentic, with a portable gong and a more authentic color scheme replacing the mirrored look that the concept sported in the 1980s. There is also a walk-through area where customers can see cooks chopping and woks frying.

"It works well," Tobin said. "When you see someone cooking, you know that someone's not in the back, opening a can of Chung King and nuking it."

Last August the company also adopted a new logo and rearranged the steam tables to merchandise the food better and help expedite service. "We are labeling foods and mixing up the colors, so now not all the browns are in one section," Tobin explained. "We also have new packaging, new plating and new serviettes."

Tobin remarked that they are also encouraging customers to sample foods and share meals. Manchu Wok also introduced pot sticker dumplings this summer and is trying to get more finger foods and appetizers on the menu.

Scott's Hospitality is the largest KFC franchisee in Canada, with more than 400 units. It recently sold its franchised KFC units in the United States to PepsiCo, explaining that it planned to expand its KFC operation in Canada while growing Manchu Wok in the United States.

Manchu Wok is 65 percent franchised in Canada and only 15 percent franchised in the United States. "We'd like to get the chain 70 percent franchised and 30 percent corporately owned in both countries," Tobin noted.