Rapheal John-Lall

Busi­ness­es in T&T need to de­vel­op a more risk-tak­ing cul­ture and al­so there needs to be more fund­ing from fi­nan­cial in­sti­tu­tions for busi­ness­es that take risks and make in­vest­ments, says Kris­tine Thomp­son, di­rec­tor of the lo­cal fran­chise of Chuck E Cheese's and for­mer chair of In­vesTT.

"In­no­va­tion in the re­search and de­vel­op­ment (R&D) sense is dif­fi­cult with­out crit­i­cal mass and the economies of scale. If peo­ple know their prize is a lot big­ger, it is eas­i­er to take the risk. In T&T, we are not, cul­tur­al­ly, a risk-tak­ing so­ci­ety. We al­so do not have the fund­ing mech­a­nisms in place. R&D and in­fant in­dus­tries re­quire gov­ern­ment's sup­port in the ear­ly stages to get off the ground; then it can be self-sus­tain­ing. T&T could have more of that," she told the Busi­ness Guardian on Tues­day.

Thomp­son, who pre­vi­ous­ly was vice pres­i­dent of busi­ness de­vel­op­ment of the CariSal chem­i­cal plant project, said the tran­si­tion from that project to set­ting up a US fran­chise in T&T was an easy one.

CariSal Un­lim­it­ed was found­ed in 2005 for the con­struc­tion of a chem­i­cal com­plex that was ex­pect­ed to pro­duce caus­tic so­da, cal­ci­um chlo­ride, hy­drochlo­ric acid and sodi­um hypochlo­rite. It nev­er got off the ground be­cause of lack of fi­nanc­ing.

"The CariSal project was a US$400 mil­lion project that we were ne­go­ti­at­ing with the In­ter-Amer­i­can De­vel­op­ment Bank and oth­er banks. It was a com­plex and dif­fi­cult process. Mov­ing away from that to Chuck E Cheese's was much eas­i­er as the project was small­er and ac­cess­ing fi­nanc­ing was much eas­i­er. The CariSal project, in a way, pre­pared me for Chuck E Cheese's as I de­vel­oped con­tacts, some of whom I used in set­ting up this present fran­chise," she said.

She added that tra­di­tion­al forms of fi­nanc­ing for in­no­va­tors are not read­i­ly avail­able in T&T as in oth­er coun­tries.

"There are the an­gel cap­i­tal­ists, ven­ture cap­i­tal­ism, oth­er sources of eq­ui­ty fund­ing that are not read­i­ly avail­able in T&T. Get­ting bank fund­ing for a new and proven idea is ex­treme­ly dif­fi­cult.

"In fair­ness, bank fi­nanc­ing is not an ap­pro­pri­ate source of fund­ing for SMEs. Bank fund­ing is not risk fund­ing. You need risk fund­ing sup­port­ed by bank fund­ing. I think young busi­ness own­ers need to be plugged in­to the right net­works of peo­ple to help them de­vel­op their ideas. I be­lieve bright minds do ex­ist. There are lots of in­no­v­a­tive, cre­ative young minds in T&T but are not find­ing their path to suc­cess with their ideas."

Thomp­son said get­ting a busi­ness off the ground in T&T is dif­fi­cult.

"We have lots of op­por­tu­ni­ties but, un­for­tu­nate­ly, get­ting busi­ness plans ex­e­cut­ed takes a lot of sta­mi­na and per­sis­tence. We have a cul­ture of au­to­crat­ic gov­er­nance where pow­er is cen­tralised at the top.

"The Cab­i­net of the Gov­ern­ment of T&T is a per­fect ex­am­ple of cen­tralised de­ci­sion-mak­ing where many dif­fer­ent types of de­ci­sions need to go to Cab­i­net for ap­proval. We have in­tel­li­gent peo­ple in the Cab­i­net but they can­not get through the ac­tion items in an ef­fi­cient man­ner. This caus­es de­lays for projects and in­vest­ments. It is dif­fi­cult."

She said one pos­si­ble an­swer is ac­cess­ing fi­nanc­ing from liq­uid­i­ty from cred­it unions and oth­er non-bank in­sti­tu­tions.

"There is a lot of liq­uid­i­ty in non-bank fi­nan­cial in­sti­tu­tions like in­sur­ance com­pa­nies, cred­it unions and oth­er places. I keep lob­by­ing some of my fi­nance col­leagues. If we could get our leg­is­la­tion to al­low even up to five per cent to back cap­i­tal to be in­vest­ed in projects out­side of an ad­mis­si­ble as­set, some­thing that does not have a three-year track record. You can­not play Russ­ian roulette with peo­ple's re­tire­ment funds but per­haps you can take a small por­tion and col­lec­tive­ly put it to­wards de­vel­op­ing good ideas in a struc­tured way."

She said T&T is not the on­ly coun­try in the world where cor­rupt prac­tices have hurt busi­ness prac­tices.

"You can find the ex­am­ple of busi­ness dis­as­ters caused by eth­i­cal fail­ings all over the world. You can look at Wall Street, look at Lehman Broth­ers, look at En­ron. I do not think lack of busi­ness ethics in busi­ness is a T&T thing. How­ev­er, we need to be able to man­age those ju­di­cial and reg­u­la­to­ry sys­tems swift­ly and cor­rect them so they do not hap­pen again. We can­not have white-col­lar crime go un­fet­tered."

She said T&T needs busi­ness lead­ers who are per­sis­tent and have the abil­i­ty to cut through the bu­reau­cra­cy that ex­ists.

"Per­sis­tence is im­por­tant. Al­so, there needs to be com­mit­ment. Nev­er give up, fol­low up and, even­tu­al­ly, it will get done."

Thomp­son's busi­ness part­ner and co-own­er of Chuck E Cheese's, Joan­na Ros­tant, ar­gues that T&T is more in­no­v­a­tive than many peo­ple think.

"First­ly, in­no­va­tion is not just about a prod­uct but about a ser­vice. Look at how maxi taxis evolved in this coun­try. It was the an­swer to poor ser­vices in the pub­lic trans­porta­tion sys­tem. Look at mas bands like Tribe and Bliss and how they have rev­o­lu­tionised that Car­ni­val in­dus­try and tak­en it around the world. They have tak­en the par­ty­ing ex­pe­ri­ence to a dif­fer­ent lev­el."

Thomp­son and Ros­tant spoke to the Busi­ness Guardian at its Ch­agua­nas of­fice.

Ex­pan­sion

Next month makes it one year since they opened the first restau­rant in Brent­wood, Ch­agua­nas, on Ju­ly 17, 2014.

Thomp­son spoke about ex­pan­sion plans.

She es­ti­mates that the cost of a open­ing a new restau­rant is $15 mil­lion.

"This does not in­clude base build­ing con­struc­tion. This sum cov­ers the out­fit­ting like fur­ni­ture, ceil­ings, car­pet, walls, elec­tri­cal, kitchen equip­ment and games. The truth is that it is 13,000 square feet that you have to out­fit and close to a 15,000-square-foot restau­rant in San Fer­nan­do."

She said they plan to open two more restau­rants over the next two years and they will be big­ger in size than the first store.

She added that their first year's ex­pe­ri­ence "ex­ceed­ed their ex­pec­ta­tions."

"Our most im­me­di­ate next restau­rant is San Fer­nan­do. We are open­ing that in the new C3 Cen­tre where Movi­eTowne in San Fer­nan­do is go­ing. That should be opened by the end of the year. It is go­ing to be 15 per cent big­ger in size and 20 per cent big­ger in games and seat­ings. We have 65 games in Ch­agua­nas and will have 85 in San Fer­nan­do. What they are repli­cat­ing in that San Fer­nan­do de­vel­op­ment is like a Movi­eTowne. So we would be in the fi­es­ta plaza equiv­a­lent, along­side oth­er ca­su­al din­ing restau­rants. The aim is that fam­i­lies would go there for en­ter­tain­ment and have a va­ri­ety of op­tions."

She said the econ­o­my will im­prove and it is im­por­tant for busi­ness to look ahead and cap­i­talise on the op­por­tu­ni­ties that ex­ist.

"Our of­fer­ings with­in the com­pet­i­tive space is su­pe­ri­or and I think, be­cause of that, the con­cept will con­tin­ue to do well. San Fer­nan­do is boom­ing right now. What the US has found is a con­cept of re­silience in a re­ces­sion. Even if you have your last $100, moth­ers want to put a smile on their chil­dren's face. So they will pay for that."

Giv­en their ex­pe­ri­ence in the cor­po­rate world, Thomp­son and Ros­tant want­ed to cre­ate a new project from the ground.

"We felt we had achieved a lot but we were not get­ting the bal­ance in our lives that we want­ed. We are moth­ers. There was the de­sire to cre­ate some­thing from the ground up, some­thing more en­tre­pre­neur­ial. A new chal­lenge. Chuck E Cheese's for us filled a ma­jor gap in the mar­ket for fam­i­ly en­ter­tain­ment.

"We be­lieved as moth­ers of young chil­dren there were not many op­tions. This of­fer­ing of the fun, en­ter­tain­ment and games which Chuck E Cheese's pro­vide–hav­ing seen it in the US–we felt it was fan­tas­tic ex­pe­ri­ence at an af­ford­able price and it would do well in T&T."

Ros­tant said the Chuck E Cheese's con­cept is very easy as cus­tomers walk in and there is menu to choose from.

"Val­ue meals are a pack­age where there are drinks, meals and the to­ken for the chil­dren to play. There are chil­dren's meals, plat­ters, sand­wich­es, piz­zas. The op­tions are lim­it­less so you can come and just play and come and eat or both. We av­er­age about $100 a per­son. If you come in with a fam­i­ly of four and spend $400 you can have a grand time for a few hours."

She at­trib­ut­es their suc­cess to be­ing able to of­fer a wider va­ri­ety than oth­er restau­rants in the ca­su­al din­ing restau­rant in­dus­try.

"We have com­peti­tors that are do­ing some of what we do; there are piz­za chains serv­ing piz­za, there are oth­er en­ter­tain­ment cen­tres serv­ing en­ter­tain­ment with some snacks. We of­fer the holis­tic ex­pe­ri­ence. The char­ac­ter of Chuck E Cheese is an or­phan but he cel­e­brates life every day. That mas­cot comes out in the restau­rant every hour and pro­vides a vibe and ex­pe­ri­ence that is hard to repli­cate."

She said the Chuck E Cheese's mas­cot is more well known than Mick­ey Mouse world­wide and con­tin­ues to grow.

"Chuck E Cheese's is now in Sau­di Ara­bia, Dubai, Pe­ru, Chile, Cos­ta Ri­ca and all over the world."

Thomp­son be­lieves that it is their well-trained staff and in­vest­ment in train­ing that keeps em­ploy­ees hap­py. They do not have the ma­jor headache of labour short­ages as oth­er busi­ness­es do.

She ac­knowl­edges there is a short­age of labour in the coun­try. She be­lieves that the way busi­ness own­ers treat their em­ploy­ees has a lot to do with whether they stay or go.

"I can­not ac­cept the premise that Tri­nis are lazy and Tri­nis are rude and we do not care. We brought down the Chuck E Cheese's team from the US for train­ing and, up to this week, they were here. A sig­nif­i­cant pro­por­tion of the staff has been with us from the start. We are com­pet­ing for em­ploy­ees the same way we are com­pet­ing for cus­tomers.

"In the labour mar­ket you are go­ing to have a com­pet­i­tive ad­van­tage if you treat your em­ploy­ees well."