Today, Don Macchiatos has grown into a nationwide chain with more than 1,000 company-owned and franchised outlets, while the young entrepreneurs behind the homegrown Cebuano brand have ventured into other businesses.
Their latest venture is aptly named Padayon Croissants and Coffee, drawing from the Cebuano word padayon, meaning "to continue" or "keep going." The name reflects the entrepreneurial journey of a group of friends who turned a simple business idea into a growing enterprise.
At the heart of the story are three young entrepreneurs—company president Mark Anthony Abangan, 34; his partner, chief executive officer Bethel Jae "Nickie" San Juan, 31; and San Juan's longtime best friend, chief operating officer Ariel Alegado, 32.
Their story is about more than selling inexpensive coffee. It is also about friendship, taking risks, building systems and learning how to sustain a business that grew far beyond its founders' initial expectations.
Friends for life
San Juan and Alegado have been friends since their days as classmates at Pinamungajan National High School in Pinamungajan town, about 57 kilometers west of Cebu City.
They pursued different paths after graduation.
Alegado spent 10 years working for a fast-food chain, where he eventually held a senior position.
San Juan, meanwhile, met Abangan at her aunt's restaurant, where their love story began. The couple later ventured into food businesses, including catering and milk tea.
They initially considered opening a salon, but their plans changed after attending barista training, which sparked their interest in making affordable coffee.
As coffee enthusiasts themselves, they began exploring the possibility of offering quality coffee at a price affordable to students, workers and other budget-conscious consumers.
They eventually decided to open a coffee cart selling just one product—caramel macchiato, the couple's favorite drink, prepared using a recipe they both loved.
Focusing on a single product was a deliberate business decision. It simplified inventory management, helped control production costs and made the product easier for customers to remember.
With limited manpower and a small operation, managing one product was also more practical than handling multiple ingredients and recipes.
The price: P39.
"We just want it to be affordable for everybody. If it is P40, it might be too pricey for a lot of people," San Juan said.
Big hit
On Sept. 28, 2022, Don Macchiatos opened its first coffee cart along Urgello Street, near Southwestern University, where San Juan had studied. San Juan personally manned the cart, preparing coffee and recording orders manually.
At first, customers were nowhere in sight. Then a few curious passersby decided to give the coffee a try.
Soon, people were lining up to sample what the company described as Cebu's first P39 coffee.
Word about the inexpensive caramel macchiato quickly spread, particularly among students who shared their experiences on social media.
By its second day of operations, the company was already receiving inquiries about franchising.
On the third day, the growing crowd caused congestion along the street, prompting barangay tanods to help manage the situation.
Alegado later joined the couple to help manage the growing business.
Drawing on his decade of experience in the fast-food industry, he introduced management systems, including operational checklists and hiring procedures, which became increasingly important as the company expanded.
San Juan said the overwhelming customer response encouraged them to open several more coffee carts across Cebu City.
Less than six months after opening their first outlet, they began offering franchises.
To make franchising accessible to aspiring entrepreneurs with limited capital, the company initially offered franchise packages for P199,000. The price was later increased to P399,000.
Four years later, Don Macchiatos has grown to more than 1,000 outlets nationwide, including 35 company-owned stores.
Alegado said about half of the outlets are in Mindanao, including locations in Basilan, Marawi and Jolo.
Beyond coffee
The success of Don Macchiatos also paved the way for 10 other business ventures, prompting the founders to establish the Don Macchiatos Group of Companies.
These include Don Lemon, a lemonade brand offering drinks starting at P29 per cup; KUKU Frozen Yogurt; and Mr. Pure Ice, among others.
The group's latest venture, Padayon Croissants and Coffee, opened on Sept. 12 on the fourth floor of Ayala Malls Central Bloc in Cebu IT Park.
Unlike Don Macchiatos' coffee-cart model, which caters primarily to customers on the go, Padayon offers a more upscale yet welcoming café experience.
Its interiors combine French-inspired design with Cebuano touches, featuring rattan furniture, flowing forms and a warm, homey atmosphere where customers can linger over coffee and freshly baked croissants.
A visible pastry preparation area adds to the experience, allowing customers to watch how the croissants are made.
San Juan said the group is applying a familiar business strategy to Padayon: making a product typically associated with premium cafés more accessible to Filipino consumers.
While croissants at many cafés can cost more than P100 apiece, Padayon offers them for P69.
The new venture also represents a departure from Don Macchiatos' original single-product strategy.
Aside from specialty coffee, frappes and non-coffee beverages, Padayon offers 18 croissant varieties developed through months of product testing and feedback from the management team.
Construction and other preparations brought the overall development period to about a year.
To maintain supply, pastries are baked at the café, with additional production support from a commissary.
Another hit
Like Don Macchiatos, Padayon quickly attracted customers.
The café sold approximately 3,000 croissants on its second day of operations, with customers lining up for freshly baked batches.
Some waited for the next batch after available stocks sold out.
The strong demand has encouraged management to explore additional branches, including potential locations in malls and standalone establishments.
For now, however, Padayon will remain company-owned.
Unlike Don Macchiatos, which expanded rapidly through franchising, the founders want to establish and refine the café's operating systems before deciding whether to offer franchises.
The more measured approach reflects lessons learned from managing a nationwide network of coffee outlets.
Secret to success
For San Juan and Alegado, the success of their businesses rests not only on affordable products and expansion strategies but also on teamwork, mutual trust, innovation and customer support.
They also credit their longstanding friendship, shared ambitions and faith in God for helping them build an enterprise that has grown far beyond their initial expectations.
"We take good care of our people. We find strength in each other," Alegado said.
Working together, however, has required learning how to separate personal relationships from professional responsibilities.
Inside the office, they recognize one another's positions and responsibilities. Outside work, they remain the same friends who have known each other since high school.
"Work is work. Then after work, we are the classmates way back high school," Alegado said.
Although disagreements occasionally arise, they encourage open discussions, respect differing opinions and make major decisions collectively.
Their shared goals and willingness to trust one another have helped them navigate the challenges of managing a rapidly expanding franchise network.
They also acknowledge the crucial role of Cebuanos, particularly students and early customers who helped popularize Don Macchiatos' affordable coffee through word of mouth and social media, without initially relying on paid influencers.
Beyond business strategies, they credit their faith, perseverance and shared ambitions for helping them overcome the challenges of expansion.
What began as a modest coffee cart has grown into a nationwide franchise network and a diversified business group, turning dreams once shared among friends into reality.
And as their latest venture suggests, their entrepreneurial journey is far from over.
Padayon. —Ed: Corrie S. Narisma
Contributor
