This is the last post of a 14-part series on entrepreneurship in Africa and the companies who participated in the inaugural Unreasonable East Africa program.


Randy Welsch, a retired software executive, was advising for several charity-backed water projects in Africa when he became consumed by the belief that he could do better. While clean-water access is a pressing issue—3.4 million people die every year from water-borne illnesses—nearly half of all donor-backed projects like those he was working on fail within three years.

Welsch felt this was primarily due to lack of local ownership (research backs him up on this). After consulting with his son, Galen—a former Peace Corps volunteer—the idea of locally owned and driven business was solidified, and they set about to change things.

We’re financing businesses with a razor-sharp focus and expertise in water purification. Tweet This Quote

So Randy and Galen Welsch and his son founded Jibu, 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.

Jibu franchises water stations that sell refillable jugs of purified water. The company operates on a turnkey model, licensing franchisees 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—basically the same model used for the propane tanks that fuel American barbecue grills.

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.

“The reality is that Jibu is a bank and franchise,” says Galen. “It’s financing businesses with a razor-sharp focus and expertise in water purification.”

The Welsches incorporated Jibu in 2012 and, since 2013, have been refining their model in three test stations—one 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—enough to provide water to about 15 percent of that region’s population within about 1.5 miles of a Jibu station.

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 throughout Africa, who are responsible for recruiting and supporting franchisees; and the franchisees themselves.

imagejibu1

$1 breakdown from water sales

Galen says franchisees should be able to recoup their initial $1,000 outlays in around three months. At that point, franchisees pay 12 percent of their revenue each month to their regional developers and a $500 monthly royalty fee that is split between Jibu corporate and regional (the fee differs by region and projected revenue). The Welches use profits from royalty funds—driving local growth organically—to finance new franchisees, develop new equipment, and provide developers and shop owners with ongoing business, logistical, and technical training.

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. “We control prices as part of the franchise agreement to ensure we are hitting target market and not competing with upper-class water bottlers,” Galen says. And for people unable to afford even Jibu’s prices, the company has partnered with various NGOs and charities to establish a Jibu Water Club to supplement their purchases.

“We’re on to something here,” says Galen. “The interest from end users and franchisees gives me the feeling we’re on the brink of taking off.”

About the author

Nate Beard

Nate Beard

Nate is a thinker and instigator who occasionally tries to write, sometimes on UNREASONABLE.is.

  • Rhea Lewis

    Modeling Jibu after a pre-existing system (American propane tanks for grills) and thinking of each station like a “bank” seems like a sustainable idea. I have some more questions after reading the article. Where is this water coming from? Is every Jibu station able to use a local supply of water and then purify it to sell the water? How many liters of water would an average family need to purchase per day? Considering the possibilities of monopolies and having Jibu stations at least 1.5 miles apart from each other was also a very good tactic to keep each station very localized.

  • Jakob Cohen

    Although i believe there is a time and place for government intervention, I believe the most efficient and effective manner of curing these social illnesses is through local efforts. It is fantastic to hear about how one group is making water affordable and easy. It is shocking to see how far some areas of the world have come while others still struggle to find clean water. Ultimately it is only the communities that fully understand their own problems and have the motivation to fix those problems. Jibu is providing an accessible platform to empower communities and provide clean water.

  • atoy333

    The Jibu’s community-based approach is very smart. I would be interested in hearing how the community reacted to the water shop and how the Welshes and their partners gained broader community buy-in. Is there one person who “owns” the Jibu shop or is it seen as a community resource? I imagine there had to be an awareness campaign that convinced people to buy water they once got for free and that it was a positive consumers and not just sellers.

  • Anto George

    While the idea is a good one, my biggest concern would be with the large share of profits that are going towards the Regional Managers. 40%? That seems a bit too much, especially in the developing world. I understand that the company needs to able to recoup its costs, but 40% does seem a bit high… Maybe consider limiting that to a few years, and then the royalty fees are lowered?

  • Jaelyn Edwards

    i like the idea of having the decisions made within the community and specialized for the community rather than outsourcing the major decisions to an office in another country. However I agree with Anto below me. It appears as if the regional mangers and the headquarters in the US are gaining quite a bit of profit that could have been put back into the community. I understand this company isn’t a nonprofit, but i feel Jibu could move towards a non profit seeking model.

  • I definitely support the idea of having the community come together to make decisions instead of having foreign teams determine things for them. I believe it is important for individuals in countries such as Rwanda, Uganda, and the Democratic Republic of Congo, who have poor access to clean water, to strive to become independent and make their own decisions about their health and the health of their community.
    As mentioned in previous comments, I believe it would be more philanthropic if Jibu made changes to become more of a non-profit seeking company… but altogether, their mission to make clean water readily available to larger populations is extremely commendable!

  • anujaya

    I love that they operate a franchise model, I feel like it is almost always superior to handing out free things like most non-profits do. However, the 40% to regional managers seems very high. Especially if that amount isn’t even going to the corporation that can reinvest in additional franchises. I’m sure there’s a good reason for this high a percentage, I just wonder what it is.

  • Galen Welsch

    Thank you everyone for your support, compliments and encouragement!

    Anujaya, Stephanie, and others:
    Thank you for your appreciation of the community ownership and franchising components. Re: the RD and being a for-profit – The RD (who is generally a franchisee who steps up to a higher level role) is responsible for marketing, maintenance, accounting, quality control, supply chain, and many other components which are critical to the success of each franchise. The RD puts in at least 40% of the effort required to make a franchise successful. Jibu Corporate does not receive any % of the profits generated. We are structured as an l3c (similar to a benefit corporation) because it allows us to pursue our charitable purpose above a profit making purpose. The possibility of recovering cap-ex however, has brought in new investors and support to the table. To us, true sustainability has to be at all levels. All revenues are poored back into growing the business. We think organic profitability is a more sustainable and scaleable approach than donor-dependency. Also, in a large part, we believe in non-patronizing approaches. Much of the viral interest we are facing from local entrepreneurs to start a franchise is because we offer a true ownership opportunity that requires co-investment and true partnership, rather than a gift or hand-out. Profitability is not a driving motive and yet it is the key enabler or us going to scale and making a permanent impact.

  • yencheskcj27

    I think this is a great company/concept. I especially like how the company forsaw the possibility of their franchisees creating a monopoly and price gouging, and set a radius and price ceiling for them. As for the comments below, I see their point, but at the same time I realize that the 40% is almost a necessity as the business is still relatively in its infancy. The funds are needed to scale the business, and decrease reliance on donors. I’m sure that as the company reaches scale, the 40% will begin to decrease.

  • Theresa Fitzsimmons

    Thank you, I think this is a great idea. It is good to know that there are good people making clean drinking water as cheap as possible for those who live off of little money. I honestly believe that having clean water to drink is a right we should have as humans, it is a basic necessity that we need to survive. In college we have discussed our opinions on what we think human rights are. I think that thinks we need to survive should be one. I also really like that this idea is Eco-friendly, re-using water jugs and refilling them. Are they going to expand and do this in other countries as well?

  • Marcy Glad

    Overcoming the problem of maintaining local operations on something that requires constant attention and overseeing, like safe water, in a way that remains affordable for local people is truly an accomplishment. By giving local merchants a stake in maintaining and marketing their product to the population in their area, there is high assurance that the product will remain safe and the equipment well-maintained. Also, the price control strategies in place to keep the pricing to something generally affordable in the area means the people should continually be able to purchase at a rate that fits within the standard local household budget. I wish this business model great success for the sake of anyone who has ever wished for clean drinking water in a remote area!

  • amandaclaire94

    I agree with you on this. Reading other articles made me realize how fortunate we are to have clean water, yet other countries are struggling. I know that I could never have thought up an idea like this, but it makes complete sense not to! I love the idea behind it acting like a bank and just like our propane systems in America. I really hope they are able to expand and reach millions of other people with clean water.

  • Brooke Bower

    It is empowering to actually read blogs that are helping people around the world. Having clean water is a basic human right, I believe. It is sad that some countries struggle greatly and lose lives to something like unclean water. I hope this business continues to grow and eventually is offered in other countries. I hope they reach their goal by 2020.

  • Thanks, @brookebower:disqus ! Let me know if you want to get involved!

  • Sabrina Ehlert

    This business model is extremely interesting. It’s like the business has a non-profit motive, but really the business is an accelerator by definition. In addition, this promotes local businesses, rather than working with foreigners who are hard to trust in the locals perspective. Very interesting.

  • ryanstorto

    This topic is on the rise and very important. We take advantage for the all the water we are able to drink, but there is actually a big business behind it. I enjoyed being introduced more to this topic in depth and understand what it really takes to be successful in this industry.

  • Katherine Noble-Goodman

    This is a very interesting model, addressing what has proven to be an extremely challenging problem. I am wondering what percentage of the population receives the water vouchers, and how the price point for the water is determined? For a family that was previously gathering water from a community well, for example, and boiling it at home as the primary method of treatment, the price point would need to be fairly low to make this an attractive option. A related question is whether the franchise owners need to advertise or does the product pretty much sell itself? In terms of the subsidized part of this model (the vouchers), does Jibu include indirect benefits to the clean water in its fundraising material, such as reduced indoor air pollution because women are burning less wood over a three-stone fire to boil water, and the savings in time from not having to fetch and boil water? Even if the distance traveled to the water source is equal, purchasing a container of water is still less time consuming than queuing up in line to fill a jerry can at a well. Finally, I am curious about mention on the Jibu webpage of expanding this model to other types of services? I have done some work in the clean cookstove sector. I am wondering if there are aspects of this model that could be replicated there and/or what other types of products Jibu is considering expanding into?

  • Samuel Cannon

    Wow, this is awesome. What particularly caught my interest was the fact that the business model is very similar to propane tanks. Taking an already existing business model and applying it in very similar but different ways proved to be successful. The breakdown seems to be very efficient and the fact that franchisees can get involved with an initial $1,000 co-investment is not only very accomplishable, but a step in the right direction for such a large problem in out world.