AC Hesed – Sustaining a regional franchise

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    • Llao llao staff preparing a cup of frozen yogurtLlao llao staff preparing a cup of frozen yogurt
    • Display of Krispy Kreme donutsDisplay of Krispy Kreme donuts
    15 June 2021

    Food makes people happy. And spreading joy through some of the world’s best-loved dessert brands is what drives Singapore-based franchisee, AC Hesed.

    In 2013, AC Hesed brought in US’ Krispy Kreme to Singapore, followed by Spain’s llao llao, Taiwan’s TP Tea and Hokkaido’s 108 Matcha Saro. Today, it operates 27 outlets across Singapore, Malaysia, Indonesia and Thailand.

    But when COVID-19 hit last year, AC Hesed faced the same predicament as many retail outlets – a plunge in footfall and sales. Cash flow was severely impacted when some of its F&B outlets closed for almost two months due to Singapore’s circuit breaker.

    To tide through the disruptions and better meet pent-up demand from customers seeking their comfort drinks and desserts, AC Hesed approached UOB for a working capital loan. The pandemic also pushed the franchisee to digitise its operations, replacing cheque-based payments throughout the supply chain. On the retail front, going cashless meant that outlet teams no longer needed to queue to make cash deposits anymore, thus saving them precious time.

    Watch this instalment of Building Asia with UOB to discover how UOB supported AC Hesed’s regional franchise business through the pandemic.



    Andy Chaw (Chief Executive Officer, AC Hesed):
    Franchise owners like ourselves bring the world’s best-loved F&B brands to customers in the region.

    In 2013, AC Hesed brought Krispy Kreme to Singapore, and llao llao in 2018. Then TP Tea and 108 Matcha Saro from Hokkaido. Today, we have 27 outlets across Singapore along with outlets in Malaysia, Indonesia and Thailand.

    We keep ingredients based on sales forecast. So when we had to close for about two months last year, we did a lot of promotions to clear ingredients. But later, pent up consumer demand meant we had to ramp up really quickly again.

    We found ourselves working closely with our bankers, because our sales were affected.

    Eric Tham (Managing Director and Head, Group Commercial Banking, UOB):
    Businesses like Andy’s needed working capital when the pandemic first hit in 2020. UOB quickly extended working capital to ease their cash flow. We also extended trade facilities for purchasing ingredients. This minimised the disruption to their business.

    Andy Chaw:
    UOB was quick with their help. This was crucial to support our business in Singapore, and also in Malaysia, Indonesia and Thailand.

    There were also times where we needed payments to be deferred and UOB was very supportive of the challenges we were going through.

    Eric Tham:
    AC Hesed used to adopt a cash- and cheque-based payment system which had to change because there were fewer touchpoints due to COVID-19.

    Andy came to us and talked about digital adoption. And we have a slew of digital products that helped Andy’s business to pivot to cashless, to have clearer visibility as well as control over cash flow.

    This also helped the business to achieve productivity by centralising all payment processing at HQ.

    Andy Chaw:
    Singapore is a special place to run business, but we suffer from a shortage of manpower.

    My goal is to integrate our finance and inventory sales systems with the payment mode provided by UOB. On the front-end, digital payments mean the outlet teams don’t queue to make cash deposits anymore, I think it’s a 15 to 20 per cent manpower productivity gain.

    We also bank with UOB in Malaysia, Thailand, Indonesia, China and Hong Kong. From time to time there are some who are interested to be sub-franchisees in Indonesia or Malaysia. UOB has a department just to make these introductions – I find that very helpful.

    Eric Tham:
    Our priority as a regional bank is to open doors to Asia for businesses.

    UOB with both breath, depth as well as local knowledge and presence… links up its financial infrastructure to create strong, connected networks that drive long-term regional growth for businesses.

    So, when Andy ventures abroad, he has a long-term partner on the journey. And that’s what we do best.

    Andy Chaw:
    I used to be a competitive athlete. I have learnt that operating a business is like running a marathon – you must maintain a steady pace and build up your endurance over time.

    With a banking partner like UOB supporting us, we expect to be running this marathon for a long time to come.

    About this series

    Building Asia is a collection of business stories on CNA that examines the financial forces driving Asia’s position as an economic powerhouse.

    AC Hesed – Sustaining a regional franchise is the ninth episode in the Building Asia with UOB series and was first aired on 14 June 2021. It looks at how UOB assisted AC Hesed with a working capital loan and trade facilities to ease the impact of the pandemic on business.



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