William Heinecke, the Thai dream
William Heinecke (Photo: Wikipedia)
An American who made a dream come true in Thailand, gave up his American citizenship and took on Thai nationality. A fairytale; actually too good to be true.
Heinecke senior was a professional soldier and served in the American army during World War II and the Korean War (1950-1953). After his retirement he worked for Foreign Affairs and lived in Japan, Hong Kong and Malaysia. Mother Heinecke was an Asia correspondent for Time magazine, which was one of the reasons why the family moved to Bangkok in 1963.
Son William (Bill) was 14 years old at the time and attended an International School in Bangkok, initiated by the US, intended for, among others, the children of US diplomats and employees of the United Nations.
Business instinct
Barely 18 years old, William (b. 1949) founded Inter-Asian Interprise, a cleaning company for office buildings. At the same time, he launched Inter-Asian Publicity, a commercial radio station. William already worked as an advertising salesman during his studies Bangkok world and had a section in that magazine about go-karting, his great hobby. The newspaper was founded in 1960 and was dissolved in 1971 by the Bangkok Post taken over. In 1980, given the sharply declining circulation, its existence came to an end. A few years later, Heinecke sold his radio station to the renowned American global advertising and marketing agency Ogilvy & Mather. After the sale, he remained managing director and chairman of Ogilvy & Mather for Thailand for several years. The deal certainly paid off.
Pattaya
Less than 30 years old, William Heinecke entered a completely different world in 1978 and became the owner of the Royal Garden Resort in Pattaya, now renamed Royal Garden Plaza. It would not stop at this one complex, because Heinecke's 'Minor International' currently owns about a hundred hotels. It now operates as a franchisee in Bangkok and Pattaya Marriott, on Phuket JW Marriott, in Bangkok, Koh Samui, Chiangmai and in Chiangrai, Four Seasons.
The Minor Food Group
In Thailand you will come across many well-known eateries that belong to the Heinecke companies and are housed in the Minor Food Group. To name a few: The Pizza Company, The Coffee Club and Thai Express; a restaurant chain specializing in Thai food. As a franchisee in Thailand, the following 'eateries' own the following well-known businesses: Dairy Queen, Swensen's, Sizzler and Burger King.
franchise
For those who are unfamiliar with the concept of franchising, a brief explanation: it concerns the cooperation between an independent entrepreneur/company (franchisor) and another entrepreneur (franchisee) who is allowed to use the name, formula, advertising and image of the franchisor for an agreed fee. . We also know this in our country. Just think of Albert Heijn, Blokker, Hema, Bruna, Mc. Donald etc. The franchisee takes advantage of the brand awareness, formula and all other benefits. Of course, there are also a number of established obligations. For example, the Minor Food Group is a franchisee for Thailand of the well-known companies described.
The Pizza War
It is not always cake and egg between franchisors and buyers. This is evident from the so-called Pizza War that sparked in 1999 between Tricon, the owner of Pizza Hut, and Heinecke. The latter adapted the ingredients of his pizzas to Thai tastes to the dismay of Tricon, who demand global uniformity.
The well-known straw that broke the camel's back came when Heinecke's business became a franchisee for the Perth Australia-based Chicken Treat Company. The American giant Tricon not only owns Pizza Hut, but also the well-known chains Kentucky Fried Chicken (KFC) and Taco Bell, making it the largest fast food company in the world. Tricon viewed the franchise in the Australian company as a stab in the back and an attack on KFC. As a result, the disagreement regarding deviating pizza ingredients within the Pizza Hut formula and the franchise agreement flared up again. An 11-month legal procedure followed, after which Heinecke itself decided to end the 20-year partnership (1980-2000) with Pizza Hut. His 116 Thai shops were converted and in March 2001 The Pizza Company opened its doors.
New Pizza Hut locations were opened by Tricon at lightning speed. According to market researchers, Heinecke's company, with a market share of more than 60 percent, has success on its side.
It is common for clashes to arise between the main company and its franchisees. At the moment there is also such a conflict in the Netherlands between the drugstore DA-retail and a large part of its 269 independent DA-entrepreneurs, of which 52 franchisees have terminated their cooperation with the franchisor DA-retail as of 1 July. All this has to do with a new store formula that the head office wants to implement and which involves a cost of 15.000 euros per store. The chain has a total of 388 DA stores in the Netherlands and the Netherlands Antilles. A simple calculation shows how important in number independent entrepreneurs can be within the distribution chain.
Minor Corporation
The Minor Corporation also operates in Thailand as a distributor for a number of well-known fashion and cosmetic brands. Some of the many brands: Gap, Esprit, Red Earth, Bossini and Timberland.
Some numbers:
- As a hotel owner, they have more than 12.000 rooms and more than 100 hotels in 14 different countries.
- The Food Group operates 1500 branches in 19 countries.
- And as one of Thailand's largest distributors of fashion and cosmetics, it has 250 points of sale.
- Hotels, restaurants and retail therefore form the business of Minor International.
William Ellwood Heinecke's net worth was estimated at $2011 million by Forbes Thailand in 425. In 1991, Heinecke acquired Thai nationality and gave up his American citizenship.
The company is listed on the stock exchange and almost doubled its profit in 2012.
Sources:
- Annual Report Minor International 2012
- Article Forbes May 16, 2013
- Bloomberg Businessweek
- The Eastern Economic Review (FEER)
- Financial newspaper June 26, 2014