With all these difficulties, aren’t there easier markets to operate in than Kenya and Tanzania?
If all I cared about today were profits, it would make no sense to be in Kenya or Tanzania. There’s a large developmental element to what we do, and we do it in a way that is much more sustainable than many of the social enterprises operating in the region. At the core of the Subway model is a brilliant, globally-proven toolkit designed to give a driven entrepreneur the know-how required to run a profitable restaurant business. Subway HQ does not own a single restaurant in any of the 100 countries in which the brand is found. They develop the system and then train their franchisees. The same goes with our relationship with our staff. In more than three years in Tanzania, we have never had an employee leave to work with another company. I’d love to see my managers own their own stores some day. With rapid urbanisation and a Kenyan population that is expected to double in the next 40 years, they should have plenty of opportunities to do so.
I have seen other international food brands launch here with a lot of fanfare and a few months down the road their stores are empty. What is your strategy to keep customers coming in long after the hype is gone?
Value is the answer to that problem and our biggest opportunity. In Tanzania, we offer an international quality product at a price that customers can afford multiple times a week. Nobody has a true value offering in Nairobi today. If you go to any of the international brands in Kenya, they are charging a huge premium compared to their menus in South Africa or the US. By taking a more sophisticated approach to pricing and by utilising value campaigns, we can set ourselves apart from the other food players in Kenya and create customer loyalty.
We are seeing a lot more young entrepreneurs from the West moving to Africa. What is the reason behind this?
At its core is the belief that in Africa it is possible to make money while doing good. Training staff, building supply chains, raising consumer expectations, paying taxes, and following the rules all have large developmental effects that you just don’t see any more in the West. The challenges are also far more interesting than you find in a place like the US. In New York I could pick up the phone and buy US$10 million worth of Ugandan government bonds and the transaction would be done in three minutes. In Dar, I pick up the phone and order 50 kilos of lettuce and the supplier only brings me five kilos because its rainy season and his truck couldn’t make it into the city. So I spend four hours driving around town trying to buy up every head of lettuce from every duka (Swahili for ‘shop’) on every street corner in the largest city in the country. The business opportunities associated with solving those challenges are bringing some of the best Western minds to East Africa.