Case Study

Case Background and Questions

Speed Eater Limited

Overview

Speed Eater Limited (“Speed Eater” or “SEL”) began operations in Hong Kong 35 years ago, as a small

family-based company. It was founded in 1978 by Matthew Chan and his wife Cindy as a single

noodle-specialist restaurant. Matthew and his wife had a dream to do for noodles what other fast food

restaurants had done for the burger – make noodles a cheap and cheerful fast food staple. They

followed this dream and soon Speed Eater noodle restaurants began to spring up all over Hong Kong,

with up to ten new outlets opening each year. The business continued to develop successfully over time,

but it became much more difficult to find suitable premises for new outlets in areas where the company

did not already have existing outlets. Matthew therefore began to expand the business into mainland

China.

Since 1998, SEL's growth in mainland China has been fast. SEL now has a large chain of fast food

outlets in Hong Kong and mainland China, which all operate under the name of Speed Eater Bars

(“SEB”). The company also operates a small chain of Hokkien Food House (“HFH”) restaurants in Hong

Kong. In total, there are now 135 outlets in Hong Kong and 56 outlets in mainland China (Beijing,

Shanghai and Shenzhen).

The company does not run on a franchise model; rather all outlets are owned and operated by SEL.

Matthew considered that franchising SEB would create too much risk of damage to the Speed Eater

brand name reputation.

The family business was listed on the Hong Kong Stock Exchange in 1998, when Cindy retired from the

company. Matthew became Chairman, a position he still holds, and has also acted as Chief Executive

Officer (CEO) for a number of years. In 2005, his son David Chan (Hong Kong CPA) took over as CEO,

after spending several years as the Chief Operating Officer. Although there are other Board members,

Matthew and David Chan exercise firm control over the business - sixty per cent (60%) of the shares in

SEL are...