Jibu Clean Drinking Water Franchises, Uganda, Rwanda and Kenya

 

CoFounder Named One OF Forbes 30 Under 30

Website: http://jibuco.com/

Franchise Background

Ninety percent of the underserved urban market in East Africa cannot afford to purchase clean, safe drinking water. Simultaneously, a lack of meaningful and viable business-ownership opportunities stifles economic growth and upward mobility. Jibu—Swahili for "Solution!"—was founded in July, 2012 by father-and-son team Randy and Galen Welsch to address these dual issues in a unique way. By supplying premium-quality drinking water at radically affordable prices, and providing emerging-market entrepreneurs with a successful and profitable business model, Jibu takes a two-pronged approach to improving the standard of living in underserved communities in Africa.

Lack of meaningful business ownership opportunities and massive under-employment trap most people in emerging markets into an undesirable standard of living. At the same time, about a billion people do not have access to daily necessities such as affordable drinking water. By identifying, unleashing, and channeling the latent entrepreneurial talent in emerging markets, Jibu is transforming the daunting challenge of addressing basic human needs into an expansive opportunity that allows thousands of properly equipped social entrepreneurs to become the solution, one neighborhood at a time.

Jibu trains and finances emerging market entrepreneurs to build profitable social franchises designed to serve the most basic needs of their community, with an anchor product of radically affordable drinking water priced at or below the customers’ cost to boil water at home. At the core of the game-changing innovation is the integration of franchisor and financial services, successfully contextualized to emerging market environments. In a very short time, Jibu have scaled a network of locally owned franchises that provide affordable, premium quality water to underserved communities in Uganda, Rwanda and Kenya, in the process providing life-changing training and jobs to many women and youth. The franchisees’ established, high-visibility, environmentally-friendly drinking water storefronts are also well-positioned to affordably offer other needed products.

The traction to date has been substantial and is accelerating quickly. In 2015, Jibu grew from 2 to 16 successful franchises. Each of these franchises also generated, on average, two new fulltime microfranchise business owners. In total, Jibu launched 50 new Jibu businesses in 2015 - about one per week – and created roughly 140 new jobs – about three per week. Jibu are currently launching new businesses at nearly double that pace. Franchisees are generating significant revenue and are at breakeven within about 3 months of their initial investment. Expansion goal project launching over 1,000 locally-owned franchises that will employ over 8,000 people and reach over 7 million with affordable drinking water and other impactful products by 2022.

 

Protégé Background
Mark Mutaahi, Country Director
As Jibu Country Director Uganda,   Mark is responsible for overseeing and managing all aspects of business expansion specifically operational maturation, business development, building strong local and international partnerships and setting strategic direction. Mark has a background in leading a multi-national carbon finance social enterprise with a focus on clean energy distribution in the position of CEO. Prior to that, he spent over a decade living in multiple cities in Canada where he was employed in the financial sector in Wealth Management and Operational roles with Capital One and the Royal Bank of Canada. Mark holds an MBA from the University of Ottawa and a BA Economics/Statistics from the University of Alberta, Canada. 


Mentor Background

Peter D. Holt, The Joint Inc. CEO
Peter D. Holt has been active in the franchise community managing franchise systems in both domestic and international markets for over 30 years.  Most recently was appointed Chief Executive Officer of The Joint, www.thejoint.com, the largest franchised network of Chiropractic clinics in the world with over 350 clinics system wide.  The Joint is a publicly traded company on NASDAQ (JYNT) based in Scottsdale, AZ.

Previously, he was President and Chief Executive Officer for Tasti D-Lite, LLC a Brentwood, Tennessee based company.  While at Tasti D Lite he transformed the NYC based licensed outlets into a complete business format franchise system.  Additionally, he led the acquisition of Planet Smoothie by Tasti D Lite in 2011 and its integration into the Tasti D Lite business. In June 2015 the company was acquired by Kahala Brands.

Mr. Holt worked seven years for Mail Boxes Etc., the last three years as Executive Vice President, Franchise Sales and Development.  MBE (now The UPS Store) is the world’s largest franchisor of retail centers specializing in shipping, business and communications services.  During his tenure the franchise system grew to over 4,000 retail locations, including some 1,300 MBE stores operating in 34 countries. 

From 1990 to 1996, Mr. Holt was Vice President of International for I Can’t Believe It’s Yogurt and Java Coast Fine Coffees, affiliates of The Brice Group.  Headquartered in Dallas, ICBIY was a franchise system of over 1,000 frozen yogurt outlets operating in 35 countries.

Mr. Holt began his career in franchising at the International Franchise Association, the oldest and largest trade association in the world serving the interests of businesses that franchise.

Mr. Holt earned a Master of Arts degree from the University of London, and completed his Bachelor of Arts degree at the University of Washington, where he graduated cum laude.  He has written and lectured extensively on the subject of franchising.  He currently serves on the Board of Directors of PASMO, the Guatemalan affiliate of the Washington DC based NGO, PSI, which provides health care services in developing nations through franchising.  He served on the IFA Board of Directors from 2013 to 2015 and as Chairman of the International Affairs Network (IAN) of the IFA from 1998 to 2007.  Additionally, he served as Chairman of the Global Marketing Group (GLOMAK) which advises IFA on all its international franchise activities from 1998 to 2007. Peter serves on the Advisory Board of the Social Sector Franchise Initiative, a project of the Center for Social Innovation and Enterprise at the University of New Hampshire.

 

 


Living Case Study Accelerator Solutions Iteration Process

SSFI Roundtable Breakout Group:

Jaime Aristotle Alip

CARD MRI

Peter D. Holt

The Joint Corp.

Marguerite Farrell

USAID

Greg Starbird

Starbird Consulting Group

Fiona Wilson

Center for Social Innovation and Enterprise

Mark Mutaahi

Jibu

Randy Welsch

Jibu

Lindsey Barari

The Susan Thompson Buffett Foundation

Michael Swack

Center for Impact Finance

Gina Occhipinti

UNH Student

Ilona Drew

UNH- Carsey School for Public Policy

 

 

 

   Critical Issues

   Mark identified Jibu’s Critical issues as:

  1. Franchisee Selection Criteria
  2. Franchisee Development
  3. Expansion Strategy: Rural Areas
  4. Regional Development Model
     
Issue One: Franchisee Selection Criteria Brainstorming Issue One Issue One Next Steps

Currently, potential franchisees are coming to Jibu, meaning that the organization does not have to generate leads for investors. Jibu’s model is attractive—for franchisees it has a low buy-in amount at about $2,000, seems like an easy job, and generates a profit quickly. Microfranchisees, operating as resellers, are required to come up with only a $300 investment to buy into the model.

Because of the low barrier to entry, Jibu can attract two types of franchisee investors that are less than ideal: 1) previously wealthy entrepreneurs who recognize the value of the business proposition, and 2) less motivated individuals who are hoping for easy money and do not expect to put in a lot of hard work.

Mark is looking for guidance on how to create fair eligibility criteria that encourages franchise investors while selecting motivated, entrepreneurial-minded individuals who will both be successful and are in need of an economic boost.

Mark reiterated that Jibu’s mission was just about empowering local business owners as it was providing safe water; that he wanted the franchise owners to represent the community they served. Having wealthy entrepreneurs as franchise owners did not fit the Jibu model of: “local owners driving lasting solutions”

First the group guided Mark to try to identify common characteristics of the successful franchisees. However, Mark said that the most effective investors were diverse, and it was hard to find elements of commonality. Peter agreed that it can be hard to know who will be successful—that people who are hungry for success AND able to handle the multi-faceted operational of franchise ownership are not quickly identified. Furthermore, some of the gumption that can create a good entrepreneur can lead to behaviors that threaten some of the alignment and replicable structure of the franchise design. Peter reminded us that there is a fine line between a rogue and a maverick.

Refine, formulize, and document microfranchisee program

  • Incentive/bonus structure (will require examination of economics of microfranchise model)
  • Use as incubator to create franchisees—This way you can identify and promote strong sellers so you know that your Franchisees are aligned with your goals.

Set criteria: for example, can’t buy a franchise until you have managed a store for a year

  • This fits the mission of reaching first-time entrepreneurs and discouraging seasoned and wealthy investors
  • Partner equity—manage-to-own

Provide microfinance loans for a) franchising fee or, b) rent for store location

  • Promotes dual mission, theory of change—underlying barriers—have to find the right partners to remove obstacles
  • Even the poorest of the poor are finding a way to buy in
  • Microfinance orgs can help with the pipeline—use as a screening process

1)Refine Franchisee Qualifications

2)Identify questions that are effective for screening

3)Consider implementing any of the following:

  • Microfranchise as training for Franchise
  • “Manager to own” Partner equity situation
  • Microfinance as part of screening
Issue Two: Franchisee Development  Brainstorming Issue Two Issue Two Next Steps

Beyond simple training, Mark is looking to develop a sales culture within his franchisees. He wants the vibe to be entrepreneurial, canvassing, promoting, building their stores—but he doesn’t know how to properly communicate this beyond spelling out the numbers needed to be profitable.

 

 

 

 

Sales Development:

  • Sales events/parties to bring franchisees together—prizes for innovative sales techniques, role playing
  • Power of storytelling; local area collaboration
  • Goal building/traditional sales training

Marketing strategies:

  • Health fairs, promotions in schools,
  • Local area marketing tool kit/Community based educators

Company-owned store as model

  • Needs to set example of “perfect” store (Currently performing poorly)
  • Use as incubator or eliminate

1)Fix or eliminate company store (or convert to earned ownership model)

2)Develop training system so franchisees profoundly understand the drivers of success

  • Ensure it is clear that buy-in will require outreach efforts

3)Create marketing toolkit with explicit documentation

4)Work on internal corporate sales culture—be the change you’re looking for!

5)Examine brand promises—does their perception match your perception?

6)Analyze differences/factors between Rwanda and Uganda

  • Brand recognition/awareness?
  • Cultural/Governmental differences?

7)Reexamine Training Model: Product knowledge vs sales training

Issue Three: Expansion Strategy (Rural) Brainstorming Issue Three Issue Three Next Steps

Jibu currently operates in urban and peri-urban areas; however, Mark and Randy have a strong desire to expand to rural locations. However, Mark has several concerns about the logistics of expansion. First, moving further from the city makes it more difficult to control quality, price, and monitor/maintain brand alignment and identity.

While the demand is there, and a rural expansion supports the mission of enabling local entrepreneurs to be engaged in solving systemic infrastructure challenges, the unit economics may make it a less attractive business proposition. Costs of transport, population density and other hurdles detract from profitability.

Why Expand? Is there a business reason or an emotional one for serving the rural areas?

Second and third tier cities are more feasible

Traditional nonprofits vs “Nontrad”

  • Nonprofits typically fail at replication; for profit companies have proof of concept and is transferrable
  • For rural areas, parameters will be totally different; financing structure will be totally different as well
  • Propane tank model? Brita style?
  • Partnership/licensing with an NGO might be a good way to reach rural areas

1)Rural Expansion? NO—(or not now!) Second and third tier cities expansion—YES!

2)Bring in Franchisees on decision making process

  • Stay relevant to consumers—listen to what consumers are saying
  • Facilitate franchisee pilot program—create time limit and support with evaluation metrics
  • Create advisory council—franchisees will listen to each other before they listen to corporate!

3)Consider licensing or partner with NGO to reach rural areas

 

Issue Four: Regional Development  Brainstorming Issue Four Issue Four Next Steps

How do you effectively structure a multi-country operation? Mark wanted a clearer understanding of how to handle internal staffing. Attracting and retaining talent, what are the key roles, key qualities required of management? How do you know if you have the right people in the right seats?

 

       

What is the corporate culture?

  • There are specific questionnaires available that are tools to assess job descriptions and make sure the right people are at the right position doing the right thing.

Data for decision making

Use IFA for basic franchising education

Join or start a franchising association in Uganda

  • “trickle down” franchise knowledge—learn from the top, help train up and comers
  • Spend time with other franchisors—likeminded people from different sectors using the same mechanism.

 

1)Conduct employee assessments (Peter to find questionnaires?)

2)Inquire about Franchise training from IFA

3)Investigate joining or starting a franchising association in Uganda