A powerful brand backed by the intellectual property (IP) system and combined with an attractive and successful franchising strategy has turned Kebab Turki Baba Rafi (KTBR) into the world's largest kebab chain, and rapid growth since its founding has allowed Baba Rafi Enterprise to become a multimillion-dollar company. KTBR is one of Indonesia's top three franchises, competing with popular international brands such as McDonald's, Pizza Hut, and Starbucks.
In nearly any large city you are likely to see kebab stands dotting the streets selling the traditional Middle Eastern dish. Kebab – a traditional dish of sliced meat (predominantly lamb but also chicken and beef) with vegetables wrapped in bread and originating in the Middle East.
On a trip in 2003 to visit his father who was working in the State of Qatar (Qatar), Hendy Setiono, then a university student, was impressed by the taste of kebabs. Recognizing the growing popularity of kebab stands and restaurants in urban areas, he decided to try and commercialize it in his home city of Surabaya, the second largest city in the Republic of Indonesia (Indonesia).
From humble beginnings as a single kebab cart, Mr. Setiono has transformed Kebab Turki Baba Rafi (KTBR) into an international success, operating more than 1,300 outlets and employs over 2,000 people worldwide across nine countries – Indonesia, Malaysia, the Republic of the Philippines (Philippines), Singapore, Brunei Darussalam, China, Sri Lanka, the Kingdom of the Netherlands (the Netherlands) and Bangladesh.
Largely unknown to Indonesia at the time, Mr. Setiono had spotted the great potential of the kebab business during his visit to Qatar. As soon as he got home to Surabaya, together with his wife, Ms. Nilam Sari, the couple began the process of researching business opportunities, developing products, and devising marketing strategies. The first thing they realized was that they needed to adapt kebabs to make them appealing to Indonesians.
In Qatar, the most popular kebabs that Mr. Setiono saw were typically the Döner kebab variant from the Republic of Turkey (Turkey). The Döner kebab is made with lamb meat (and sometimes veal, beef, or a mixture of these) that is cooked on a vertical spit, after which pieces of meat are sliced off and wrapped together with vegetables and spices in a taboon bread, a type of thin flatbread.
Understanding that the typical size of the taboon bread used in the Döner kebab – 30 centimeters in circumference – could make it a tough sell in his home market, the entrepreneurs decided to make their kebab wraps smaller. Not only that, but as Indonesians were not familiar with the distinct taste of lamb the couple decided to use beef and chicken instead.
Mr. Setiono also found that the flavor of the product needed to be changed to match Indonesian tastes. The kebabs that the entrepreneur enjoyed in Qatar are typically seasoned with cardamom (a strong, aromatic spice that comes in green and black varieties) and clove (a common spice in the Middle East that comes from the clove tree). While these spices are well known in Indonesia, Mr. Setiono found that the amount used in the kebabs from Qatar would likely be too strong or too foreign for most Indonesians and decided to substitute in some more local flavors.
Even as a child, Mr. Setiono wanted to be an entrepreneur. "I've always been interested in making extra money from my interests and hobbies," he explained. Feeling the excitement of realizing his childhood dream, the novice entrepreneur was ready to launch his business – all he needed was some startup capital. In 2003 his younger sister lent him the 4 million Indonesian Rupiahs (approximately US$340) to purchase a pushcart, ingredients, and supplies to sell kebabs close to the university, but business did not take off. In fact, there were not many customers and study obligations meant spending more on hiring help.
Determined to make his venture a success, the new business owner decided to quit university and dedicate all his efforts to his kebab cart. Having already completed two years of university, many of his family and friends were concerned with his decision as they felt the kebab stand was more of a hobby than a viable employment opportunity. However, shortly after turning his full-time attention to the kebab cart, business started to pick up.
A few weeks later, the lines in front of his cart were so long that he realized he had to open more carts to meet demand, and within one year the entrepreneur found himself opening three new kebab stands in the area. The company grew, and in 2004, the entrepreneur managed to open up six more KTBR locations throughout Surabaya, all focused on providing fast service and kebabs made with fresh, high-quality ingredients.
With KTBR locations, including pushcarts, stalls, and full-service restaurants, rapidly multiplying, Mr. Setiono soon realized that local meat suppliers could not keep up with the demand. Without safe, high quality meat for his kebabs, expansion options would be limited.
To overcome this, in 2009 KTBR partnered with PT Belfoods Indonesia (Belfoods), one of Indonesia's largest food suppliers. Such a partnership ensures that the entrepreneur's products are made with ingredients that meet the stringent standards, including food safety and quality assurance, of the Indonesia National Agency of Drug and Food Control.
In addition, Belfoods has Halal certification (Halal describes foods permissible for Muslims to eat) from the Indonesian Ulema Council (IUC), the country's top Muslim clerical body. This certification is important for KTBR's many Muslim customers. Mr. Setiono then began to establish warehouses in major cities, such as Surabaya, Malang, and Semarang, to ensure the quick delivery of ingredients and other products to all of KTBR's locations.
When he first started his business, Mr. Setiono was selling kebabs from a plain white pushcart. If he was going to be more successful, he knew he needed to create an easily recognizable brand name and change the look of his cart to be more appealing. The new business owner chose the name "Kebab Turki Baba Rafi," which has a multifaceted meaning:
Typically, the signage of the company has "Kebab Turki" in large letters with "Baba Rafi" in smaller letters underneath, as this would make the name quicker to read and easily recognizable. Mr. Setiono chose a color scheme of bright red and yellow to attract people passing by as well as to create a lively atmosphere. With a brand name and image created, the entrepreneur worked over the ensuing years to spread the word of his brand.
I worked to slowly build a brand, opening new carts, stands, and storefronts while employing offline and online media techniques to spread the KTBR name.Hendy Setiono, founder and CEO of KTBR
To ensure that the company's brand is more than a catchy name and eye-catching colors, Mr. Setiono makes certain that the brand stands for quality food products that meet consumer's expectations by employing a number of initiatives. For example, as the company grew Mr. Setiono implemented improved quality control systems, better warehouse management of supplies, enhanced logistical support, and training.
With such a recognizable brand, it is essential for KTBR to protect their IP portfolio in order to maximize continued growth. To that end, the company has relied on the IP system. In 2005, Mr. Setiono made a trademark application for the "Kebab Turki Baba Rafi" logo with the Directorate General of Intellectual Property Rights (DGIPR) of Indonesia, which was registered in 2007.
In 2009, the entrepreneur filed applications for the company's updated logo with the DGIPR of Indonesia, which were registered in 2010 and 2016. In addition, a trademark for another stylized logo, "Chicken Kebab Baba Rafi", was registered in 2014.
The company has also ensured protection of its brand in the countries in which it has expanded. For example, in line with KTBR's entrance into Malaysia, KTBR filed a trademark application in 2012 for its name and logo with the Intellectual Property Corporation of Malaysia (IPCM) under class 29 of Nice Classification, which was registered in 2017.
In 2011 and 2012, KTBR also made a trademark application with the Intellectual Property Office of the Philippines (IPOPHL) for two stylized logos, "Kebab Turki" and "Kebab Turki Baba Rafi", which were registered in 2012 and 2013, respectively.
The company registered the stylized logo and slogan "Kebab Turki Baba Rafi The World's Biggest Kebab Chain!" with the Intellectual Property Office of Singapore (IPOS) in 2016 and "Kebab Turki Baba Rafi" with the Brunei Darussalam Intellectual Property Office (BruIPO) in 2017.
In addition to trademarks, Mr. Setiono recognized early on the importance of maintaining a presence on the Internet and maximizing search engine optimization. To that end, KTBR owns a number of domain names, including babarafi.com and babarafienterprise.com. Furthermore, the company also maintains a presence on the popular video sharing website YouTube (KebabTurkiBabaRafi) and social networks such as Facebook (@kebabturki) and Twitter (@KebabBabaRafi). Through these platforms, KTBR can reach out to old and new customers, and also provide them with an accessible venue to interact with their favorite kebab brand.
One innovative feature that the company introduced was a special cardboard package. In many cases, kebab wraps can be messy to eat, because the sauce can drip through air pockets where the bread is folded. In other cases where it is wrapped too tightly, it can lead to the accidental consumption of the wrapping.
To solve this problem, KTBR developed a sturdy, easy-to-carry cardboard container with a special tab that eliminates these issues. Pulling up on the tab will slowly lift the kebab out of the container, and continual pulls on the tab will pull the kebab up so that it can be easily eaten.
The packaging was registered as an industrial design with DGIPR of Indonesia in 2009 for the original container shape (DGIPR Registration No. IDD0000025274) and in 2013 for the container with the pull tab (DGIPR Registration No. IDD0000034571). The design has met with great success among consumers, and encourages the company to continue improving its products and services. These registrations help protect KTBR's innovations and ultimately enhances KTBR's reputation and brand image.
As KTBR became more popular, Mr. Setiono started to think about the best way to further expand the brand and company. Instead of opening new stores individually, the entrepreneur decided that launching a franchising system would yield the most desirable results. "Eager for faster growth," Mr. Setiono explained, "I decided in 2006 to introduce a franchise model.
To attract potential franchise investors, I participated in company exhibitions, industry fairs, and public events, promoting both a ‘can't miss' business opportunity and a growing brand." Shortly after the launch of its franchising scheme, KTBR was flooded with hundreds of applications. As these franchises took off, the KTBR brand name quickly spread throughout Indonesia.
…it is safe to say Indonesians have enthusiastically embraced the kebab.Hendy Setiono, founder and CEO of KTBR
Franchising proved to be the most successful way for the company to enter into the international market. For example, when Mr. Setiono decided to expand his company into Malaysia in 2012, KTBR entered into a partnership agreement with INKY Sdn Bhd (INKY), a Malaysian company that became the "Master Franchise" for KTBR in Malaysia.
Through this agreement, INKY handles the logistical, legal, and promotional aspects of the franchising brand activities for more than 20 KTBR outlets in the country. This includes representing and managing the KTBR IP portfolio for using the brand and recruiting sub-franchisees. KTBR also allows for single outlets. With this popular brand, Mr. Setiono continues to successfully bring more quality food products to consumers in Indonesia, key markets in Asia, and beyond.
Mr. Setiono took a big risk by leaving university to pursue his dream, but his entrepreneurial spirit, innovative business strategies, and use of branding and the IP system have propelled him to the forefront of the Indonesian food industry.
"Looking back," Mr. Setiono explained, "the abrupt end of my studies was probably one of my biggest blessings even though I had to start from the bottom, which was both physically and emotionally draining." However, any negative sentiment he encountered only strengthened his resolve and pushed him to form Baba Rafi Enterprise, a holding company for the entrepreneur's current and future brands.
...what makes a successful entrepreneur is that they are doing work that can benefit many people and provide an opportunity to create jobs.Hendy Setiono, founder and CEO of KTBR
With Asia's most well-known kebab franchise and one of the region's internationally driven brands, it seems the young entrepreneur's risk has indeed paid off.
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