Corporate News
By EVELYN SITUMA
In Summary
- Subway last week placed newspaper advertisements seeking lease and rental space of between 600 and 1,000 square feet.
- Liberty Eagle Holdings submitted and won a bid to open yet another Subway outlet at the new Terminal 4 of the Jomo Kenyatta International Airport (JKIA).
American food chain Subway has stepped up its Kenya
expansion plans, terming its outlets in Nairobi as the “best” performing
in Africa.
The food chain, which opened its first outlet at The
Junction last year and runs another one on Kenyatta Avenue, has set a
target to unveil a new store every three to four months with the third
branch near the Village Market set for opening in the next two months.
The franchise for Subway International in Africa is
held by Liberty Eagle Holdings, a company that is jointly owned by two
entrepreneurs.
“We are just starting to market the brand in
Nairobi yet our average sales per store is already the best in Africa
for Subway,” said Christopher Bak, a director and co-owner of Liberty
Eagle Holdings who, however, declined to disclose the food chain’s
performance figures.
The American group has more than 42,000 outlets in
107 countries around the globe. In Africa, the chain has outlets in
Egypt, Djibouti, Tanzania and Zambia.
Liberty Eagle Holdings Ltd is headquartered in Dar
es Salaam. “We are very pleased with our performance in Kenya and we are
actively searching for locations to set up new restaurants,” he added.
Subway last week placed newspaper advertisements
seeking lease and rental space of between 600 and 1,000 square feet. The
food chain is seeking long-term leases in Westlands, Hurlingham, Upper
Hill, Lavington, and along Thika and Mombasa Road in Nairobi.
Liberty Eagle Holdings submitted and won a bid to
open yet another Subway outlet at the new Terminal 4 of the Jomo
Kenyatta International Airport (JKIA), but an appeal lodged against the
tendering process is pending determination before the Public Procurement
Oversight Authority.
The JKIA branch would add to 165 outlets that Subway already operates in major airports around the globe.
“We hope that they will again agree that we are an
attractive partner for the new terminal,” said Mr Bak, who jointly owns
the Subway Africa franchise with business partner Alden Edmonds.
The two are funding the expansion from sales
revenues and their own cash injection. Their attempts to borrow from
local banks have not yet been successful, a factor they attribute to
Kenyan lender’s insistence on collateral security to cover any loans.
“We’re interested to partner with Kenyan banks to
fund this growth, but most of them seem to prefer to finance property
development and to lend against land holdings,” said Mr Bak. Most Kenyan
retail outlets are housed in rental or leased space, yet banks are only
keen on lending against land title deeds.
Subway says it will soon start offering catering
options for office workers in Nairobi’s central business district.
Subway’s expansion bid may, however, be slowed by the shortage of prime
space in Nairobi .
Property valuation expert Reginald Okumu says most
retailers are only keen on leasing ground floor spaces where there is a
lot of foot traffic, which has escalated rental charges for the few
available prime spaces.
An American born entrepreneur, Mr Bak’s stint as a fund manager in Africa informed his decision to invest in the continent.
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