FIP is a weekly series where Andy Narracott (@AndyNarracott) has conversations with people moving the needle in social enterprise. Each episode discusses strategy, tactics and practical advice to help you build your own venture.
Jibu has a network of about 60 franchisees selling high-quality drinking water from their own stores. The typical outlet has a mini water filtration facility in the back, and a retail area in front.
For a small initial fee, franchisees are provided with a full suite of equipment, training and tools required to run a successful business, with water as the anchor product. Jibu then shares in the revenue earned by its franchise partners.
Being a Jibu franchisee can be lucrative, with the typical business breaking even within a few months. The company therefore receives many applications from prospective entrepreneurs. But not everyone has what it takes. To separate the wheat from chaff, Jibu has developed an innovative micro-franchisee model to test shortlisted franchisees before investing any money in them.
It works as follows: Micro-franchisees operate from tiny storefronts on the edge of a full franchisee’s territory, or in a new neighbourhood not covered by Jibu. They don’t produce water on site, but instead buy water at a discounted price from existing franchisees. Micro-franchisees make very little money, but it is a way for entrepreneurs to prove themselves.
“In any business you can interview people, you can get references, you can like someone, but you never know how it is actually going to work out until you work with someone. So it is a way that we try before we buy, before we do the investment in a full franchisee,” explained Welsch.
“Micro-franchisees go into it knowing that they may not be chosen to be a franchisee, but the number of people willing to take that risk for the opportunity is pretty significant. So it has been great in terms of being able to get the cream of the cream of franchisees,” he added.
Listen to the full interview through the media player above.