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Jibu Safe Water Franchises - Update: Expansion into New Markets 11/18

Jibu's profitable, East African franchises purify water from any source using solar-powered ultra-filtration equipment.

Photo of Anne Welsch

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EXPLAIN YOUR IDEA

Two challenges constrain Africa's emerging market: the drinking water crisis and the under/unemployment crisis. Jibu aims to tackle the systemic roots of both crises by training local Africans to be successful social entrepreneurs. These entrepreneurs, half of whom are women, will scale up a network of locally-owned drinking water franchises, each providing affordable, safe and great-tasting water to the local community. Here’s how it works: • The franchisee opens a small shop near the community’s water source. • The water is drawn into the store and then purified using solar-powered, water treatment equipment customized to Jibu’s need by the charity Healing Waters. • Jibu covers startup costs and other expenses to get the franchisee up and running. • Franchisees pay a small startup fee plus a percentage of future revenue. • Then they bottle and sell the water in reuseable 20-liter and 7-liter attractive, branded jugs for about the cost customers would pay to boil the water and at a fraction of the price of commercially bottled water. • Franchisees are spaced about 1km apart to blanket an area like networked cell towers to give convenient walking access for every person.

WHO BENEFITS?

Jibu targets the middle 70% of the East African population -- the upper 10% can afford to buy expensive bottled water, while the lowest 20% can only afford water through subsidies. We have already established franchises in Kampala and Kigali and plan to launch next in a Nairobi slum.

HOW DOES YOUR IDEA TAKE INTO ACCOUNT THE CONTEXT OF URBAN SLUMS AND CLIMATE CHANGE?

Our idea is built on an understanding of maximizing limited resources, while relying on the leadership and ownership mentality of local community members with entrepreneurial drive, who have previously lacked the opportunity to open and manage a business. The key to the Jibu business model is the integration of franchisor and bank. The bundling of these two services provides the fair-financing, system, capitalization, and accountability for urban leaders to provide safe water to a vast emerging market. Jibu's purification systems are highly environmentally advantageous, due to the high energy efficiency of the SolarPure system (which uses less power than a standard toaster), the durability and recyclability of our bottles, our low-radius distribution model, and the household reduction in fuel usage due to no longer boiling water in order to purify it.

IN-COUNTRY EXPERIENCE

  • Yes, for two or more years

EXPERTISE

  • I’ve worked in a sector related to my idea for at least two years

GEOGRAPHIC FOCUS

  • Yes

TELL US A BIT ABOUT YOURSELF

I work part-time for Jibu, and prior to that for non-profit organizations. The Jibu team is young, creative, and extremely dedicated to making a lasting difference in underserved African communities.

IS THIS A NEW OR RECENT IDEA FOR YOU OR YOUR ORGANIZATION? HOW DOES IT DIFFER FROM WHAT YOU ARE ALREADY DOING?

A few months ago, we began exploring the idea of launching a water franchise in an extremely high-density and impoverished neighborhood. Prior to this, since the company's conception in 2012, our water franchises have served the urban poor, but have not been located in slums. Our newest franchise, anticipated to open in late November 2015, will be the first in a slum as well as the first in Kenya (our other franchises are in Uganda and Rwanda).

HOW IS YOUR IDEA DIFFERENT FROM OTHER SIMILAR INITIATIVES? WHAT ARE YOU DOING DIFFERENTLY? WHAT UNIQUE ADVANTAGES DO YOU HAVE?

We are not a charity, non-profit or NGO - we are a for-profit social enterprise focused on making profit and making impact. We are not a typical for-profit business either - we are organized as a hybrid L3C that better enables profit to fuel our charitable goals. While we sell water for a profit, we do not directly compete with bottled water companies. Commercial bottled water is not affordable to our target market, who typically boil or do not treat their water. Our customers easily understand our value proposition: Jibu water is higher quality and more convenient than boiled water, for the same price. Our distribution model also sets us apart. Jibu’s high volume/low margin model is predicated on a decentralized distribution network. Like cell towers decreased the need for land lines, our honeycombed franchises avoid the need for large infrastructure projects to pipe water. Finally, while we have charitable goals, we are not driven by pity or patronization. Our co-invested local franchisees are are inter-dependent peer business partners with us and their fellow-franchisees. They pay upfront for the right of real ownership and largely control their own successes or failures.

WHAT ARE SOME OF YOUR UNANSWERED QUESTIONS ABOUT YOUR IDEA?

While our model is proving successful in Kigali and Kampala, we would like to test our idea in a new market (a Nairobi slum), to see if our business model is transferable from one urban context to another. We would also like to explore whether our franchise model would be an effective vehicle for selling other health-improving products in addition to water, such as telemedecine or low carbon footprint stoves.

WHY DO YOU THINK THE PROBLEM YOUR IDEA SOLVES FOR HASN'T BEEN SOLVED YET?

Historically, the majority of water projects worldwide have been charitably funded by non-profits and NGOs. While these organizations have greatly increased the amount of safe water available in the developing world, they have suffered from a lack of local ownership, leading to lack of sustainability. To solve the water crisis, a new model is needed, one that does not rely on donor aid and which is led by local entrepreneurs.

HOW HAS YOUR IDEA CHANGED BASED ON FEEDBACK FROM YOUR COMMUNITY?

We have learned many lessons in the process of launching our first franchises, including the organic development of a reseller system, in which customers bought large quantities of bottled water from a franchise and began reselling the water in local kiosks and market stands. We began providing discounted water to resellers who agreed, on the basis of the discount provided, to not resell above a maximum resale price. Resellers have now become our pipeline for franchisees. Authorized reselling allows us to develop a long-term relationship with a potential franchisee candidate before awarding a franchise, and gives us a chance to test the market response in specific neighborhoods. We now require that all franchisee candidates go through the reseller pipeline before we will consider them for a fully-fledged franchise.

WHAT WOULD YOU ULTIMATELY LIKE TO ACHIEVE WITH THIS IDEA? WHAT IS YOUR NEXT STEP TO GET THERE?

While drinking water is our immediate focus, our ultimate goal is to launch a network of independent social entrepreneurs who, with high visibility retail storefronts and proven business acumen, are poised to revolutionize the African market and pave the way for developed world resources to become more effectively deployed in emerging markets. To get there, our next step is to test and prove our water distribution model in new markets.

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Photo of Pascale Leroueil
Team

Dear Anne -- I love the idea of look at water as a high volume / low margin business.  One question I had was related to quality control.  In your previous work, did you ever run into an issue where your re-sellers were selling fake Jibu water? (e.g, they just filled the bottle themselves with water from another source)  If so, what steps have you put in place to keep your re-sellers honest?** 

Sincerely,
pascale

Photo of Anne Welsch
Team

Dear Pascale - thanks for the feedback and question. We have not encountered resellers (microfranchises) selling fake Jibu water because we have taken proactive measures to ensure quality control. ​Jibu bottles are sealed with both a ​tamper-evident seal and a plastic cap​ at the franchise location where the water is packaged (where the MF purchases from)​​. Bottles with broken seals are considered contaminated and are not allowed to be sold.​​ ​Because Jibu operates in an urban context, there is a general knowledge among customers that products you buy should have safety seals intact. ​​If Jibu customers ever encounter an unsealed bottle, it is unsafe and should not be purchased. As a further quality control measure, we make unannounced visits to microfranchises to monitor their bottles, and we require microfranchises to report sales to their local franchise owner. If we were to see that a microfranchise was selling large quantities of water but rarely restocking their bottle supply, we would suspect that they were refilling bottles with unclean water and would investigate.​ And finally, microfranchisees undergo an extensive selection process, including interviews and competency testing, and once selected, receive training and sign an agreement about product security.​

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