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Issue 05 F&B

The Restaurant That Forgot It Was a Business.

5 min read

Issue 5 — F&B

Three businesses. Three different cities. Three different menus. One identical mistake. They all believed that if the food was good enough, everything else would follow. It never does.

The first pattern: Rent that made sense on day one.

In Singapore's F&B landscape, a new outlet feels like momentum. The brand is working. Queues are forming. The logical move is to expand. So they sign leases. Orchard. VivoCity. Jewel. Each one justified by the performance of the last.

What they don't model is what happens when one outlet has a bad quarter. Or when the anchor tenant next door closes. Or when footfall shifts because a new mall opens two MRT stops away. Rental commitments don't flex. Revenue does.

You can win on taste and lose on lease structure.

The second pattern: The business runs on people it cannot keep.

F&B has always had a manpower problem. But the post-pandemic version is different in kind, not just degree. The expectation gap between what the role pays and what the work demands has widened to the point where local hiring is almost theoretical. Dependence on foreign workers creates a different vulnerability — quota changes, levy increases, policy shifts become operational crises overnight.

The founders I've observed didn't ignore this. They hired. They trained. They lost people to competitors offering ten dollars more a month and started again. What they didn't build was a system that didn't depend on any individual staying. The business was only as stable as its least committed staff member. In F&B, that's an existential condition, not an edge case.

The third pattern: Franchising as a funding strategy, not a growth strategy.

This is the one that's hardest to say out loud. Some F&B expansions aren't really expansions. They're cash raises with a franchise agreement attached. The founder needs capital. Franchising delivers upfront fees. The business looks like it's scaling. The P&L looks like growth.

Until the franchisee opens in a location that doesn't work. Or cuts corners on the recipe. Or discovers the margins don't support the royalty. Or simply walks away. The brand takes the damage. The customer doesn't distinguish between company-owned and franchised. A bad outlet in Johor Bahru hurts the queue in Tiong Bahru.

Franchising done well is a systems business. Most F&B founders franchise before they've solved the unit economics. They're hoping the next outlet solves what the first one couldn't. It doesn't.

What actually needed to happen.

Not fewer outlets. Better covenants — leases with break clauses, turnover-based rent structures, shorter initial terms. Not cheaper staff. Simpler operations — menus engineered for consistency with minimal headcount, systems that survived turnover because they didn't depend on institutional memory. Not no franchising. Franchising with proof — unit economics validated across three locations, different demographics, different footfall profiles, before a single franchise agreement was signed.

The food was never the problem. The business model sitting underneath it was.

The cases in The COO Files reflect real operational patterns and situations encountered across Singapore businesses. Identities, scale, and identifying details have been changed to protect client confidentiality.

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