By Smita Krishnaswamy

WHEN it came to running restaurants, Mr Rick Lee and his brother were running around like headless chickens at first, with little clue about the enormous task they had undertaken.

'In those days, educated people didn't go into the restaurant business. When people found out, they asked me - how are you going to make money competing with so many chicken rice outlets?' said Mr Lee.

Luckily they got their heads straight pretty quick and after one false start, have managed to take a modest eatery and transform it into the Five Star Hainanese Chicken Rice chain.

After all, it was not as if the family, who came to Singapore from Hainan in the 1930s, were complete strangers to the food business.

'My father was a cook before and my brother was also a very good cook,' said Mr Lee, but opening a restaurant was a whole different kettle of fish.

'There were so many things to deal with - tenancy agreements, renovation, kitchen organisation, manpower, administrative issues. But eventually we caught on.'

Five Star's first restaurant was in East Coast Road, which Mr Lee, 57, and his brother opened with a bank loan in 1989.

They added a second outlet - in Bishan - but were forced to close both in 1996, partly because of the downturn.

'We had nothing new to attract customers - so we temporarily stopped,' Mr Lee said.

Despite getting their fingers burnt, they decided to give the food game another shot in 2000, again in East Coast Road. This time, Mr Lee brought in another partner, long-time friend Yeo Ban Seng, 57, who was also in the poultry business.

They also put a new offering on the menu - kampung chicken - to give them an edge in the increasingly competitive chicken rice business.

The free-range chickens are bred in sheds on farms in Johor Baru, rather than in cages.

'They are allowed to run around so they are more lean and tasty than chickens bred in a cage,' Mr Lee said.

The East Coast eatery adopted a family restaurant concept, offering a full menu of dishes priced at affordable levels.

Business boomed and the partners decided to make the most of it. 'Kampung chicken brought in the crowds, so we thought it was a good time to expand. We opened at a new location every year after 2000,' Mr Lee said.

Five Star now has four outlets - in East Coast, Upper Thomson, River Valley and Upper Bukit Timah - with a total annual turnover of about $6 million and more than 100 employees.

The partners were careful to pick locations with a good mix of public and private housing. Five Star's River Valley outlet stays open until 3am or even 5am on some days to catch people staggering out of the clubs in the nearby Mohammed Sultan Road area.

The four restaurants were initially managed by Mr Lee and Mr Yeo but their sons have since joined the business.

Mr Lee's son Ethan Li, a 26-year-old civil engineering graduate of National University of Singapore, joined Five Star last year.

Mr Li, who also runs an auto workshop in Thomson Road, said he faced none of the scepticism that his father had encountered when he first started Five Star.

'Nowadays, people are quite receptive to young people going back into the family business. I think it's a new perspective in this day and age,' he said.

Mr Yeo's son Brendan, a 30-year-old business graduate of Royal Melbourne Institute of Technology, also joined Five Star last year. He said that coming from a business-oriented family - his father started his first business at age 20 - motivated him.

'When it comes to business - it's all about real life. There's really no prerequisite - you just have to get into it and explore,' he said.

The sons have helped improve operations by introducing an electronic ordering system and building a website for the business.

Before long, customers from overseas who had frequented the eateries were showing interest and inquiring about franchising opportunities.

Last year, after surveying potential locations, Five Star helped set up and open two restaurants in Jakarta that are operated on a franchise model.

But franchise royalties contribute only a small portion to Five Star's total revenues and Mr Lee plans to expand further overseas. He wants to focus on Asian countries where rice is the staple diet.

'We are still getting inquiries from countries like Australia, the Philippines and Japan,' he said.

The chain is also open to setting up more outlets in Singapore - as long as the right opportunity comes along. 'Good locations are quite difficult to find,' he said.

Mr Li said it was possible that they may expand further afield but it would be quite a challenge because 'there are a lot of cultural differences'.

He added that the core of the business would probably still be chicken rice. 'It is still part of our winning formula but we can always adapt to a new concept of delivery,' he said.

The downturn has affected revenues slightly but it has not changed things too much, said Mr Lee. Five Star is taking advantage of government programmes like the Jobs Credit scheme and is even upgrading its facilities.

When asked about his formula for success, Mr Lee put it down to Five Star's constant focus on quality: 'We stress very heavily on taste - we don't compromise on quality, especially when it comes to the chicken rice.'

This article was first published in The Straits Times.