{"id":14101,"date":"2014-08-25T05:00:37","date_gmt":"2014-08-25T11:00:37","guid":{"rendered":"https:\/\/tested-neuron.flywheelsites.com\/?p=14101"},"modified":"2015-12-21T11:10:32","modified_gmt":"2015-12-21T18:10:32","slug":"africa-series-jibu","status":"publish","type":"post","link":"https:\/\/unreasonablegroup.com\/articles\/africa-series-jibu\/","title":{"rendered":"A Hyper-Local Model for a Global Water Problem"},"content":{"rendered":"<p><em>This is the last post of\u00a0a <a href=\"https:\/\/wary-sunlight.flywheelsites.com\/category\/eastafrica\/\">14-part series<\/a> on entrepreneurship in Africa and the companies who participated in the inaugural <a href=\"http:\/\/unreasonableeastafrica.org\" target=\"_blank\">Unreasonable East Africa<\/a> program.<\/em><\/p>\n<hr \/>\n<p><strong>Randy Welsch, a retired software executive, <\/strong>was advising\u00a0for several charity-backed\u00a0water projects in Africa when he became consumed by the belief that he could do better. While clean-water access is a\u00a0pressing issue\u20143.4 million people die every year from water-borne illnesses\u2014nearly half of all donor-backed projects like those he was working on fail within three years.<\/p>\n<p>Welsch felt this was primarily due to lack of local ownership (<a href=\"http:\/\/test.iwaponline.com\/wp\/01106\/0696\/011060696.pdf\">research backs him up on this<\/a>).\u00a0After consulting with his son, Galen\u2014a former Peace Corps volunteer\u2014the idea of locally owned and driven business was solidified, and they set about to change things.<\/p>\n<blockquote class=\"right\"><p>We&#8217;re financing businesses with a razor-sharp focus and expertise in water purification.<span id=\"tweetquote\"><a href=\"https:\/\/twitter.com\/intent\/tweet?url=http:\/\/ow.ly\/CDC1N&amp;via=unreasonable&amp;text=&quot;We're financing businesses with a razor-sharp focus and expertise in water purification.&quot;\"><i class=\"fa fa-twitter\"><\/i> Tweet This Quote<\/a><\/span><\/p><\/blockquote>\n<p>So Randy and Galen Welsch and his son founded <a href=\"http:\/\/jibuco.com\/\">Jibu<\/a>, a water project based on a hyper-local franchise model that ensures key decisions are made on a community-by-community basis, by the people who live in them, rather than from a central office or by teams of foreign volunteers.<\/p>\n<p>Jibu franchises\u00a0water stations that sell refillable jugs of purified water. The company operates on a turnkey model, licensing\u00a0franchisees at a $1,000 co-investment, which provides them with a startup package that includes water-purification equipment, refillable bottles, packaging, point-of-sale systems, branding, and business training. Once a Jibu shop is up and running, customers purchase refillable containers of water for around five cents per liter. They return the empty jugs, which the Jibu station refills to be sold again\u2014basically the same model used for the propane tanks that fuel American barbecue grills.<\/p>\n<div id='impactspace-api'><\/div>\n<div id='data' img class='alignleft' style='padding:6px;'><script language='javascript' type='text\/javascript' src='http:\/\/impactspace.com\/is\/js\/impactspace-api.js?name=jibu&#038;key=E-JhFx42&#038;type=comp'><\/script><\/div>\n<p>While the Welshes have spent considerable time and expense researching affordable purification technologies and assembling their startup package, their real goal consists of two components: First, to act as financial backers for potential franchisees by financing the initial $1,000 outlay. And second, to provide continual strategic and logistic support. That way Jibu is less a chain of cookie-cutter outlets and more a loose network of individual small business owners all working together in the water industry.<\/p>\n<p>\u201cThe reality is that Jibu is a bank and franchise,\u201d says Galen. \u201cIt\u2019s financing businesses with a razor-sharp focus and expertise in water purification.\u201d<\/p>\n<p>The Welsches incorporated Jibu in 2012 and, since 2013, have been refining their model in three test stations\u2014one each in Rwanda, Uganda, and the Democratic Republic of Congo. Their goal now is to have at least 400 up and running across East Africa by 2020\u2014enough to provide water to\u00a0about 15 percent of that region\u2019s population within about 1.5 miles of a Jibu station.<\/p>\n<p>The Welcshes incorporated as an L3C (limited-liability, low-profit corporation), a permutation of an LLC that requires a benefit to society before profit. They settled on a three-tiered structure, with corporate headquarters in North Carolina; regional developers\u00a0throughout Africa, who are responsible for recruiting and supporting franchisees; and the franchisees themselves.<\/p>\n<div id=\"attachment_15592\" style=\"width: 310px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/wary-sunlight.flywheelsites.com\/wp-content\/uploads\/2014\/10\/imagejibu1.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-15592\" data-attachment-id=\"15592\" data-permalink=\"https:\/\/unreasonablegroup.com\/articles\/africa-series-jibu\/imagejibu1\/\" data-orig-file=\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/10\/imagejibu1.jpg\" data-orig-size=\"465,275\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"imagejibu1\" data-image-description=\"\" data-image-caption=\"\" data-medium-file=\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/10\/imagejibu1.jpg\" data-large-file=\"https:\/\/unreasonablegroup.com\/articles\/wp-content\/uploads\/2014\/10\/imagejibu1.jpg\" class=\"wp-image-15592 size-medium\" src=\"https:\/\/wary-sunlight.flywheelsites.com\/wp-content\/uploads\/2014\/10\/imagejibu1-300x177.jpg\" alt=\"imagejibu1\" width=\"300\" height=\"177\" \/><\/a><p id=\"caption-attachment-15592\" class=\"wp-caption-text\">$1 breakdown from water sales<\/p><\/div>\n<p>Galen\u00a0says franchisees should be able to recoup their initial $1,000 outlays in around three\u00a0months. At that point, franchisees\u00a0pay 12\u00a0percent of their revenue\u00a0each month to their regional developers\u00a0and a $500 monthly royalty fee that\u00a0is split between\u00a0Jibu corporate and regional (the fee differs by region and projected revenue). The\u00a0Welches use profits from\u00a0royalty funds\u2014driving local growth organically\u2014to finance new franchisees, develop new equipment, and provide developers\u00a0and shop owners with ongoing business, logistical, and technical training.<\/p>\n<p>In order to prevent monopolistic price gouging, each franchisee serves customers within only a roughly 1.5-mile radius and at prices they have agreed on with Jibu. \u201cWe control prices as part of the franchise agreement to ensure we are hitting target market and not competing with upper-class water bottlers,\u201d Galen says. And for people unable to afford even Jibu\u2019s prices, the company has partnered with various NGOs and charities to establish a Jibu Water Club to supplement their purchases.<\/p>\n<p>\u201cWe\u2019re on to something here,\u201d says Galen. \u201cThe interest from end users and franchisees gives me the feeling we\u2019re on the brink of taking off.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Father-son startup in Africa combines banking and franchising strategies to bring clean drinking water to millions in the next five years.<\/p>\n","protected":false},"author":121,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[1537,476,1541,1503,1493],"tags":[326,2247,1397,220,1398,1409,1408,383,1407,485],"class_list":["post-14101","post","type-post","status-publish","format-standard","hentry","category-africa","category-article","category-2014_east_africa","category-east_africa","category-water-tags","tag-africa","tag-article","tag-bfp","tag-design","tag-intdev","tag-beard","tag-profile","tag-starting","tag-uea","tag-water"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - 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