A Legendary Makati Hangout Is Expanding to the U.S.
Some of our fondest beer-pong memories were made here.
For partygoers of a certain age, Cable Car is a familiar name. First opened by American businessman Thomas Welch in Makati in 1992, the watering hole takes inspiration from the bar scene in San Francisco, California. It has since carved a reputation for itself as a relaxed late-night hangout for everyone, from students to twenty- and thirty-something yuppies.
Cable Car is celebrating its 25th anniversary in the Philippines
Cable Car expanded by opening several branches in the 1990s and early 2000s. Welch sold the business in 2007 to a Canadian entrepreneur, who in turn sold it to a group of investors two years later. By that time all the other branches had closed down and the bar had gone back to only one branch—the original located along Arnaiz Avenue (formerly called Pasay Road) in Makati.
“This was probably one of my first 'gimik' places,” says Romeo Pastoril II, one of the seven shareholders of Cablecar Restobar and Gameroom Inc., the company that acquired Cable Car from its previous Canadian owner. “I remember when I was in second year high school in 1997, my friends and I would come here, to Hard Rock Café, and then to Mars. So yeah, in my late teens, I already knew that I wanted to own a bar.”
Pastoril worked in the real estate business—first with Megaworld and then with Century Properties—before he became involved in hospitality. He says he was already making plans to open a bar-and-grill type of restaurant along with a group of friends and his brother when fate stepped in. In 2009, while watching a UFC game in a bar, they were approached by someone who turned out to be the Canadian owner of Cable Car.
“He just came in, talked to us and offered us the bar,” Pastoril says. “Of course we said we were interested.”
Just a few months later, the group became the new owners of Cable Car. But the excitement of finally calling himself a bar owner came with the daunting responsibility of actually running the business, and everything that comes with it. Each of the seven shareholders, including Pastoril’s brother Jose Andrew Enrico, owned 14.3 percent of the company.
“We bought it with a large amount of debt,” reveals Pastoril, who is now Cable Car’s president and CEO. “Seven figures. We had to take it on. It was really a risk. On our first night, only one aircon was working, some of the speakers weren’t working. It was so hot, but the place was packed. It was a bit embarrassing but people really enjoyed themselves.”
Cable Car is known for their fun beer-pong nights
The bar now has seven branches around the country
After the initial high of relaunching a well-liked brand, Pastoril says he and his partners rolled up their sleeves and got to work. They started by professionalizing the business and not acting like they were customers.
“You know what they say, ‘Don’t get high on your own supply,’” he says smiling. “I stopped thinking of myself as the owner because you’ll only feel entitled. I always treat myself as an employee. It was going to be hard for me na yung lifestyle ko, ganun din, so, I’m here purely for business and, of course, to work.”
The new business owners started by taking a look at the whole business, identifying the problem areas and setting up a proper organizational structure. “You need to cultivate the culture, the discipline of your people. We studied the Labor Code. We strengthened the different aspects of the business—you needed Human Resources, you needed an accountant, you needed training and development, an operations head, everything.”
“We saw the problem areas and made sure they didn’t happen again,” he says. “Our approach became more proactive. We set up lots of action plans that we just started implementing.”
Within a few years, the group felt they were ready to expand the business once again. In 2012, Cable Car opened its first branch in Tomas Morato, Quezon City. Branches in Cebu, Bonifacio Global City, Ortigas, Iloilo and Pampanga (Clark) soon followed. The latest is in Eastwood City, which they expect to open this month, bringing the current total to seven branches.
Two out of the seven are franchised (Iloilo and Clark). Pastoril explains that they get a near-constant stream of inquiries from people interested in franchising the Cable Car brand.
For those interested, he says they started the franchise fee of Cable Car at P500,000. They then raised it to P750,000 and now, the fee is up to P1 million.
“We’re still getting a lot of inquiries, even until now,” he says. “We’re not even marketing it that much. But there are certain processes that we have to do, like the evaluation, credit investigation, basically due diligence. But it’s heartening because there are a lot of people who really want to invest. This time, I think after seven years of experience, we’re going to be much more aggressive and bullish in expanding the brand and branches.”
Cable Car is also expanding its menu offerings
In fact, if plans push through, Cable Car might soon expand overseas. “Probably mid-2018,” Pastoril says. “We were supposed to do it in 2015, but (we encountered some problems). But, like I said, a lot of people are inquiring about the brand. So we have plans to open in Dubai, in the U.S. and some cities here in Asia. But we’ll take it one step at a time. After Eastwood, we plan to put up more branches here in the Philippines.”
The company’s latest financial statement on file with the Securities and Exchange Commission (SEC) showed it grossed P32.3 million in revenues in 2015 compared to P31.5 million in 2014. However, an uptick in cost of sales and administrative expenses meant its net loss of less than a million pesos in 2014 ballooned to P6.5 million in 2015.
One other way Cable Car is expanding is through its menu. Pastoril says they enlisted the services of consulting chef Paolo Gutierrez in order to offer new food items and become more of a restaurant-bar than just simply being a watering hole. He says he’s not worried the change would dilute the appeal of the brand.
“We’re just becoming more flexible,” he says. “We’re creating more avenues. I think it’s okay to reinvent once in a while.”
In addition to their legendary beer pong tournaments and mouthwatering dishes that include their iconic Cable Car Rice, Pastoril says what keeps people coming back is their service and the nostalgia factor.
“We’ve had clients who were 18 when they first started coming here. And now young people are coming here because of the memory of their parents. We also get a lot of famous people—PBA players, actors, politicians. You’d be surprised. So it’s all word-of-mouth. And they pass it on. We want to strengthen that, sustain it and just keep improving.”
This story originally appeared on Entrepreneur.com.ph. Minor edits have been made by the Spot.ph editors.