Subway Franchise Expansion in Africa as a Sign of Brain Gain


Christopher J. Bak is an American entrepreneur specializing as a Subway sandwich franchisee operating Subway locations in…East Africa. Bak currently runs two Subway restaurants in Tanzania and is in the process of opening an outlet in Kenya this coming August. His small, but growing, enterprise is an example of how doing business in developing countries can be mutually beneficial for the business owner and the local economy. In an interview for How We Made It in Africa, journalist Dinfin Mulupi asked Bak if he thought that there were easier markets to operate in than Tanzania and Kenya.  Bak replied, “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.” In the meantime, what Bak is doing is no easy feat since Tanzania and Kenya are risky ventures. According to the International Finance Corporation and the World Bank’s Ease of Doing Business Index, Kenya ranks 121 out of 185 countries. Tanzania ranks 134. The U.S.A. ranks number 4.  A good ranking on the Ease of Doing Business index means the regulatory environment is more conducive to the starting and operation of a local firm. Expatriates like Bak are a growing example of Brain Gain. Brain Gain is the opposite of Brain Drain. Brain Drain is a term often used to describe the exodus of the highly-skilled from an impoverished country to a stronger economy. Brain Gain represents a new and promising trend of skilled expatriates migrating to more challenging economies to start-up businesses in new markets. Brain Gain entails a bit of social-entrepreneurship as it contributes to much-needed jobs and raises the standard of living for the employees and the suppliers. Ventures by Brain Gainers ultimately have a beneficial trickle-down effect on the local economy they do business in. Perhaps, as well, it may have a trickle-up effect by expediting a demand for a regulatory environment to support more small businesses. -Maria Caluag Source: How We Made it in Africa,  IFC/World Bank, Photo: Subway


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