How Jose Magsaysay Jr. grew Potato Corner from one kiosk into an instantly recognizable brand that spans the Philippines and the world.

Starting at the end, it is hard to imagine the humble beginnings of Jose Magsaysay Jr. and Potato Corner. Today, the company has over 1,400 branches–1,200 in the Philippines and 200 in Indonesia, the United States, Canada, and Panama–and its brand has instant recall. Potato Corner was also recently acquired by Shakey’s, positioning it for further growth. Yet in the beginning, Potato Corner was simply one “French fry stand” and four business partners, including Jose “Jomag” Magsaysay Jr., the natural born entrepreneur.

Jomag’s entrepreneurial journey began early in his career, while he was working at Wendy’s. “I was starting a family,” he recounts, “and then I started thinking [about] how can I make extra money or income. So I started selling watches [and] small appliances to my fellow employees.” 

During that time, he would also take on all kinds of side jobs or extra work. “Once I could fill a car full of those empty [Wendy’s] French fry boxes, I brought all the boxes to a junk shop in Bulacan and sold them.” 

One of those side jobs was a small business with his brother-in-law Ricky Montelibano: a flavored French fry stall in SM Megamall called Potato Corner. The partners began with PHP150,000 in capital and Jomag ran the business.

Facing competition from over 300 other brands, Potato Corner soon achieved dominance by quickly multiplying the number of its branches through franchising. Innovations in its product, branding, and technology further fueled the company’s meteoric growth. 

The Business Manual recognizes the entrepreneurial achievements of Jose Magsaysay Jr. by honoring him with the CEO Award for Entrepreneurial Excellence. By harnessing the power of franchising and employing constant innovation, he catapulted Potato Corner from one kiosk to become a ubiquitous part of the lives of countless Filipinos.

The CEO Award for Entrepreneurial Excellence

The CEO Award for Entrepreneurial Excellence is a special category in The Business Manual’s CEO Awards where the website’s editors choose honorees for their entrepreneurial achievements in growing businesses.  In partnership with Pharmaton, the award showcases leaders who are one in both body and mind. Each honoree must display outstanding leadership in two categories:

For the “Mind” category, candidates should demonstrate impactful pivot decisions made within the last three years. These individuals must substantiate their capacity for active decision-making, thoughtful analysis, and strategic leadership.

Keen insight and critical decision-making is only half the story. For the “Body” category, candidates should exhibit successful milestones achieved during their tenure through proactive execution and entrepreneurial initiatives.

Jose Magsaysay Jr. embodies this kind of leadership. Through an astute plan that leveraged the power of franchising, Potato Corner experienced explosive growth through the years. His masterful execution of this plan placed franchisees at the very heart of Potato Corner’s business through financial crises and the COVID-19 pandemic, placing Potato Corner in a strong position in today’s business landscape.

From 1 to 1,400

Simplicity is at the heart of Potato Corner’s business, but oftentimes a simple idea can be the hardest to find and the hardest to implement. Jomag came across the big idea behind Potato Corner simply by necessity. “The innovation of Potato Corner was really to multiply the number of outlets,” he shares. “Because in the first two years of Potato Corner, we tried to count how many people copied the flavored French fries business, and we counted at least 300 different brands.” The answer was clear: the only way to beat a legion of competitors without a huge war chest of investment was to franchise.

Yet simplicity went beyond the business plan. Even the process of franchising was made simple. “We just shook hands,” Jomag says of his first franchisee. “There was no [written] agreement. There was nothing. In fact, it was not a franchise. It was a partnership—a joint venture. We just called it a franchise.”

Likewise, franchise fees were simple. Jomag says, “If you look at Potato Corner, [for] the last, almost 30 years, our franchise fees were relatively the same—flat. We never increased it because we wanted our partners, our franchise partners, [and] franchisee partners, to recover their investment quickly.”

It wasn’t long until the number of Potato Corners swelled into the hundreds, then to 1,400, where it stands today.

Innovations

Together with Potato Corner’s thrust to expand through franchising, constant innovation also played an important role in the company’s success.  “[Compared to] the other flavored French fry businesses, I think we stood out because we didn’t buy seasonings or flavors from Divisoria or Quiapo,” Jomag shares. “We had our own seasonings developed—custom-made for Potato Corner. Even our international stores are still custom-made up to now.” 

The flavors of the French fries was only one part of Potato Corner’s formula for success. Jomag explains, “The second [innovation] I always say is the novelty because it was the first time people saw people [cooking fries in front of them]. We shook the fries. [It was] the ritual, the showmanship. So it’s very important that there is always a ritual that you own.”

Further innovations, such as the use of smaller fryers that fit in a kiosk, made a significant impact. With smaller fryers, the cost of franchising went down, which in turn led to more franchisees. Jomag says, “When we started in 1992, it cost PHP 70,000 to be a Potato Corner franchisee. You partner with us [for just] PHP 70,000.”

Focusing on the Franchise Partners

Knowing that business is a marathon, not a sprint, Jomag always focused on his relationships with franchise partners.

“During bad times—during the Asian Financial Crisis [and] during this pandemic, you know who took care of the company? Our franchisees. They took the bullet for us,” the entrepreneur says.

Knowing the key role franchise partners play, Jose Magsaysay Jr. returns the favor as well. “But during good times, we always take the bullet for them. Those spikes in high costs, those spikes in some financial [areas], we take the burden for them. We make sure we stabilize costs for them,” he adds.

For Jose Magsaysay Jr. and Potato Corner, it’s simply about sharing. And to Jomag, sharing means allowing franchise partners to join in their success by also becoming successful entrepreneurs. “We share our entrepreneurs,” he says. “During the last 25 years, we encourage our employees to be entrepreneurs also.”

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