They arrived to Thailand in early 2012 with savings earmarked for some months of fun and travel. Four years later, in January 2016 they cashed in big by serving almost 13.000 customers in their three Sandwich-franchises around Phuket. Meet young Danish Sandwich-entrepreneurs Daniel Baven, 28, and Mark Perthu-Hansen, 25, the guys behind the popular Lucky 13 Sandwich in Phuket.
Daniel Baven was facing life-changing events, when he broke up with his girlfriend in Denmark. He crashed on a patched up air-mattress at a friend’s apartment, living in the same building as the girlfriend he just departed from. His clothing and an X-box 360 was more or less all he had left, as he had previously given away all of his belongings to his former roommate, before moving in with the girlfriend.
Time to move he thought, travelling to Phuket for holiday in December for 12 days with his friend whom offered him a spot on the floor during this difficult time.
12 days of partying and exploring paradise was convincing enough. Daniel immediately quit his job as a chef at the fine dining restaurant where he had worked for five years, and bought a one way-ticket bound for Phuket. In February 2012 he returned with one month’s salary and a pending holiday pay arriving on the account in April.
Before his arrival he had researched intensively about expatriate lifestyle and other people’s experiences in Phuket as well as applied for around 200 jobs in the hotel and catering industry in both Phuket, Bangkok and other places around Southern Thailand. The effort left him with two job interviews. The first at Mangosteen in Rawai, but unable to say a “sawasdee krap”, they didn’t find him suitable for a job as head chef for an only Thai-speaking kitchen. Interview number two at the BYD Lofts in Patong however got him a job right away.
Daniel moved into a low budget studio apartment on Nanai Road in Patong while getting tossed straight into the high season vibe in BYD Lofts busy restaurant, managing a 14-people big kitchen in Patong. It was a steep learning curve for Daniel. The first few months of work were intensive, but then Daniel soon went into party mode – big time. During this period he was introduced to Mark Perthu-Hansen by his former trainee, Kenn, that was on holiday in Phuket.
Mark and Kenn fell in love with Phuket, just as Daniel did. They returned seven months later in September 2012, bought two mattresses and crashed in Daniel’s new two-room condo. “Imagine two months of Roskilde Festival, drinking and partying every night”, Daniel says when picturing this period “It was intense”.
The intense Phuket nightlife and a full time job didn’t go hand in hand.
“I arrived to work late in the afternoon with little focus on running the restaurant”, he says. Eventually he left the job after eight months employment.
“All right”, he thought “This is the end of this crazy amazing trip, I’ll use the money I have left and return to Denmark”.
So the parties continued and Daniel was set to return during Christmas 2012, but then, in the last hour, he got an interesting inquiry.
“Hajo Von Keller, the owner of Mangosteen Resort & Spa, contacted me”, Daniel recalls. “Their head chef had left with half of the staff”.
Now they wanted Daniel as new Executive chef. Daniel took the job right away, and moved to Rawai with his two companions, Mark and Kenn, all very eager to try and build a life of their own in Thailand. It was the perfect escape from the madness of Patong.
They signed a 3-year contract on a 4-room townhouse at 12/34 Viset Road in Rawai with no idea what to use it for. The only sense behind it was that they’d have a room each and a livingroom to share. Two days after putting down the deposit and first months rent, Kenn suddenly discovered his true account balance and soon after returned to Denmark. He was out of cash and it was over for him.
“That was a surprise”, Mark says “We were left with four totally empty rooms, which we had used almost all of our savings on. We slept on mattresses on the floor and filled the rooms with cheap outdoor plastic furniture as we didn’t have any cash left for proper furniture. Not even cabinets for our clothes… It was lying around in plastic bags”.
They completely stopped the drinking and partying. Daniel went to work with new resolve and Mark tried to find something to get his hands on. “Many times we talked about the possibility of opening a simple pasta-shop in the ground floor of the house”, Daniel remembers, but after screening the surrounding areas and concluding that there was at least ten Italian restaurants, they scrapped the idea.
But then: ”One evening while chilling at our balcony we came up with the idea to do a sandwich-shop. There was only one in the area and they used really crappy hot dog bread for their sandwiches. We wanted to do something proper”, they decided and Lucky 13 Sandwich took form: “I was wearing a really ugly belt, that I bought for my first apprentice salary when I was 15, but it was the only belt, that fitted me at the moment and I was wearing it for my uniform at work. It said Lucky 7 Bastard on the buckle that was formed as a horseshoe and then we ended up deciding on Lucky 7 Sandwich”, Daniel explains. They later modified it to Lucky 13 Sandwich because of the irony between Lucky and 13.
The day after work began straight away. They developed two models; one extra cheap and a proper one that they presented for their parents. Going with the cheap model, they took a loan of 150.000 baht each from their parents.
“I’m very positive that they did not expect us to actually do this”, Daniel says and Mark interrupts: “They were probably just looking forward to see us again in some months, when the money was spent”.
But things accelerated. Daniel was still working full-time at Mangosteen, while Mark was strolling the nearby streets in Rawai to get some cheap deals on chairs, tables, kitchen equipment, carpenters, plumbers and so on. “But this is always how it works, even from day one, Daniel is never there until the store is set up and ready to operate” Mark laughs.
Lucky 13 Sandwich in Rawai had it’s grand opening the 18th of December 2012. Daniel and Mark had spent a total of 450.000 baht. “The room was totally sterile, we had used cheap outdoor furniture for both inside and outside; we had made everything ridiculously cheap. In addition to this, Daniels ex-girlfriend was working there for free as our only staff member. The only decoration we had, was a broken toy-helicopter, that we bought in drunken moment,” Mark recalls.
At the opening day Daniel was in Malaysia to renew his Visa for the new work permit. Full of expectations he called Mark to ask for a report on their first day. They sold one coffee, Mark reported. “I was crestfallen”, Daniel says.
The concept was based on having only food that Daniel and Mark wanted to eat featured on the menu. Including coffee and beverages they had thirteen menu items, from a few breakfast options to simple sandwiches, they recall. Slowly they started to sell some sandwiches, but it was far from a success. By the end of January 2013 they had sold 280 sandwiches since opening their doors.
“We didn’t have a goal, we had no idea about revenues and stuff like that. We just wanted a place that had potential to finance our rent and then eat some good food”, Mark says, admitting that this was not sustainable in the long run.
Then, in February 2013, Ken Novak, owner of the Swedish lingerie shop “Evas Underklæder”, a friend they had met throughout their time in Patong, opened the door to a new world of customers, introducing them to Facebook advertisements. He set up a page for Lucky 13 Sandwich, made Daniel and Mark administrators and showed them a few things that had worked well for him.
“This was a huge turning point for us. It cost a bit of money, but we were getting 10 visitors more a day”, Daniel Explains. The Facebook advertisements they used, and still use, is one of the things that has taken Lucky 13 Sandwich to where it is today by “getting out there”, for a minimal cost compared to traditional advertising options.
Just some weeks after the Facebook-revelation Daniel, full of confidence that this could actually work, hired his former deputy head from BYD Lofts, named Aim. This was a big step in the enterprise, as Aim was hired with a monthly salary that was high for such a poorly performing sandwich place selling only 280 sandwiches per month. But she was more than worth the money, they state.
“Aim is still today the biggest key to our success”, Daniel explains.
Her first important call was to expand opening hours from 8am until 9pm. This however, was not a success right away.
“We had one or two guests extra per day maybe”, Daniel recalls. “But more and more of them became regulars, even though they weren’t proud to be”, he laughs.
Actually the success was far from predictable at that time. By April 2013 Mark is forced to return to Denmark to make some money on the side, that could fund the project. Daniel still works at Mangosteen and does what he can to support the poorly performing business from his paycheck. In June they make the decision to introduce a new angle to the project. Daniel moves out of the house, which means they now have four rooms free to make money on as a guest house. They get listed on Booking.com and this idea saves the Lucky 13 Sandwich enterprise in the end.
“We had ugly losses in 2013, but we made money on our guest house, so that was how the company kept afloat”, Daniel tells, at the end of 2013 positive that they would never really be able to make serious money on selling sandwiches.
But sales were slowly increasing; by January 2014 selling 1200 sandwiches – a significant improvement compared to a year before, when the number was less than 300. The progress encouraged them to make their biggest investment so far. One Kawasaki Ninja motorcycle each bought from the profits of Lucky 13 Sandwiches. Almost. The Kawasaki’s erodes the economy and Mark must again return to Denmark in April 2014 to work, exactly like the year before. “It was a terrible move, but totally worth it” Mark firmly adds.
Daniel’s full time job at Mangosteen brightens and things are going well despite his venture on the side. He is promoted to Food and Beverage Manager in June 2014. A perfect chance to make a proper living in Thailand.
But then he meets a girl. She encourages him to put all his efforts on the Lucky-business. In August 2014, two months after the promotion, he quits the job at Mangosteen and works full time at the beloved Sandwich-shop. He recreates all the menus, develop a diet plan and gets in touch with two experienced franchisers from South Africa, Tom And Mike Pullen, mentoring him in the business field.
“It was heavy studying of franchising and the strict models it demands for it to be an option. You don’t simply just make a franchise business, I can tell you that”, Daniel states.
At the same time Aim, the store manager, makes the decision to keep the shop open for 24 hours with free delivery around the clock. “I’m positive that this was the key to a new era. I think it changed the customers mentality towards us. People realized that they could always depend on us to satiate them and then they just refused other offers”, Daniel explains and adds “From that point on we started to have regulars that ate our sandwiches everyday and some even several times a day. It rapidly grew our brand into something people were taking serious”. In other words sale increases.
When Mark returns in October 2014 the business is revolutionized. The brand of Lucky 13 is suddenly in high demand.
In November 2014, Daniel and Mark sells their first Franchise store. Two Austrian guys, Michel and Matthias, who had followed the concept closely and showed interest in opening a shop in Patong several times was now ready to talk business. Negotiations developed rapidly from no intention to open anything during this high season, Michel and Matthias decide to invest in what is now the Lucky 13 Sandwich Patong store.
By 10am the 4th of December 2014 the hotel “Aim Patong” serves its last breakfast buffet. The morning after, on the 5th December at 6am, Lucky 13 Sandwich opens their first franchised store in Patong and serves their first sandwich. “We built the store and was operational within less than 24 hours. We regret not to have done a video time lapse of this, cause this is quite a big accomplishment”, Mark says.
During the first days of December 2014 while sitting in Lucky 13 Sandwich Rawai discussing the timeline and task lists attached to the Lucky 13 Patong project, along with their South African mentors and consultants, an Italian guy walks up out of nowhere and interrupts the meeting. He wanted to hear more about franchising. “Okay”, they said, “We’re busy right now but meet us here tomorrow at 2pm”.
The next day he was there, Daniel and Mark presented the business model, and the guy wanted to open a new shop right away. “This was very unexpected. We didn’t have the capacity to open another”, Daniels says, “So then we offered him to buy the one in Rawai and he did”. By December 2014 they had opened Lucky 13 Sandwich Patong and by January 1st, Lucky 13 Sandwich Rawai had changed ownership from Daniel and Mark, to Daniele, the Italian guy turned Franchisee.
Daniel and Mark works in Patong full time, cooking, serving and everything in between. In January 2015 they have more than 7000 customers through the doors, once again a massive improvement from the year before. But surprisingly enough Daniel and Mark ends up referring to 2015 as the year of mistakes.
They invested all their funds won by the sale of Rawai into a 3-storage building in Patong as their new head office and central kitchen. It had it all, reception, conference rooms even a lounge area upstairs and down. To fill the space they hired 12 new staff members including a Business Development Manager, Marketing Executive, their own Accountant, as well as Kenn taking on the job as manager of the central kitchen and Marks mother who was a perfect fit to their business with her extensive education and experience in the field, as general manager of the Patong store.
Lucky 13 was traveling on rails, except it was not. The new staff was all very good people, they state, but they didn’t know how to use them, and they didn’t have a fully developed business model. Daniel and Mark lost track of things including the Patong-shop.
“Fuck, I thought”, Daniel recalls. They were losing money. “In April we just knew it was game over. We had to fire everyone. Even my mom and our friends”, Mark explains. “It was really, really hard”. Overnight Lucky 13 was transformed from a promising young franchise to threatening bankruptcy.
“We were about to close it all. This was a really tough blow for us”, Mark admits. “We were down in the dumps for months”, Daniel adds. They moved the central kitchen to the garden in Rawai where it all began. Mark now building a shelter-like room for a very sparse budget, wherein the central kitchen would now operate. Daniel began to renew the menu again and they were both trying to rethink the company from bottom to top. “We needed to get our head out of our asses, end the stupidity and rebuild the franchise from our hard earned learnings”, Mark says.
After two several months of a brutal low season, they were slowly getting better, still selling a lot of sandwiches. In September 2015 Bernie, an Englishman owning a guest house in Kamala, had also heard good things about Daniel and Mark. He had a beach side shack with nothing of use in it and Mark immediately sees the opportunity to transform this into a store. It quickly became a no brainer for Bernie to open a Lucky 13 Sandwich franchise here as this was almost the perfect match for the concept. Bernie opened the third Lucky 13 shop in Kamala October 13th 2015.
Since then business has only improved. In the month of January 2016 Daniel and Mark have sold sandwiches to almost 13.000 visiting customers. Now developing on a more sustainable plan for the company, avoiding new crisis and threatening bankruptcies in the future, after learning about general business and the importance of strategy and sustainability, the hard way.
Right now they are fully focused on constructing a streamlined backwards integration, meaning that instead of depending on suppliers to provide their products, they plainly produce things within their own supply chain and develop new branches to the business, such as bakery, coffee, catering and even the yoghurt company being used now is in consideration of partnering up with Daniel and Mark. “In this way, we can lower costs for ourselves, we can provide the products cheaper for all franchises, encouraging more interest from investors as the privileges that follows are significant bonuses to everyone within the chain. This means that business is pretty much in our hands and we rely on fewer and fewer collaborators who takes a cut. This way, we’re taking control and rapidly gaining influence in the Phuket market”, Daniel says.
As days are looking bright for Lucky 13, the ambitions are following. “I think all opportunities are open right now”, Mark says, stating that they are still holding back with opening new franchises right now, even though investors shows interest, but “we imagine to open one or two new shops around Phuket this year”, he says, mentioning Chalong and Phuket Town is currently being enquired about from interested investors, for the next shop.
If this goes well, Bangkok or even international expansion could be next up. Daniel and Mark just have one dogma: “We want to keep the business in the Asian region. And we want paradise within reach. Paradise, palm trees and tasty Sandwiches, that’s something that we will never want to miss out on”, Daniel concludes.