Toridoll Holdings, operator of Japanese udon restaurant chain Marugame Seimen, is acquiring Jointed-Heart Catering Holdings for HK$1 billion, according to reports.
Jointed-Heart Catering runs about 50 shops in Hong Kong under the Tam’s Yunnan Noodles brand.
The noodle restaurant chain was established in 1996 by the Tam family, and has been renowned for its Yunnan-style spicy rice noodles.
Tam Chai soon became popular after food critic Chua Lam recommended it in 2000.
There is actually another chain with a similar name — TamJai SamGor Mixian — and the two are somewhat connected at the root.
After 12 years of operations, members of the Tam family failed to agree on the way forward and decided to go their separate ways in 2008. Some chose to stay in the original operation and some started afresh, thus the establishment of TamJai SamGor.
Currently, both brands own more than 50 outlets in Hong Kong, and they offer almost the same menu.
Compared with fast food chain Tsui Wah Restaurant (01314.HK), Tam’s Yunnan Noodles reported a smaller turnover and much higher profitability. Here are some of the reasons it is able to achieve that.
First of all, Tam’s Yunnan Noodles offer just the right menu to fit the market needs. With a price point of around HK$20-30, the food is very affordable.
In fast-paced Hong Kong, most people want something simple and they want it quick; the chain offers exactly that.
The menu is flexible, offering lots of combinations and then spicy grades, suiting different tastes.
Its management recipe is also quite inspiring. Largely employing middle-aged mainland immigrants as waitresses, the chain benefits from lower staff turnover and improved efficiency.
Because jobs are not easily available for this group of women, once hired, they are often rather committed.
The company goes a step further to motivate staff by offering flexible work hours to help these women balance work and the need to take care of their families. An education fund has also been set up to support the children of workers in their pursuit of a college education.
Another secret lies in the food production process. Most of the ingredients can be centrally prepared and then delivered to each individual shop. The noodle preparation process is relatively simple and hence can be standardized, meaning less demanding in terms of chef requirements.
We shall see if Toridoll can successfully take this local chain global.
This article appeared in the Hong Kong Economic Journal on May 16Translation by Julie Zhu
[Chinese version 中文版]
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