Internation al Opportunities
International Opportunities
International Franchise Opportunities page 41
How to Spot the Ideal International Franchisee 20 Adapting Core Identities for the Global Marketplace
26 Analyzing and Selecting International Markets
29 Five Ways to Avoid Getting Stuck at the Border
32 Cross-Border Franchising: A First Look
FEATURES
Continental Divide: Growing an International Brand
Colorado-based Jibu, a 2015 IFA Franchising Gives Back Silver Award Winner, embraces the unique challenge of having 100 percent of its franchisees in East Africa. BY ANNE WELSCH
F
or years while living and working in Africa, Jibu’s founders, Randy and Galen Welsch, had watched efforts to bring clean water to Africa fail. While numerous charities and their donors had good intentions in addressing the drinking water crisis, many fell short and the infrastructure fell into disrepair. Randy and Galen realized that by giving local communities a stronger sense of ownership, particularly through franchising, they could establish a much more sustainable model that could help thousands of people in underserved communities across East Africa. Since our founding in 2012, Jibu has grown to 18 locally owned clean water franchises across Rwanda and Uganda, with an additional pilot that has launched in Kenya. While our growth has been rapid, especially given our small team of four U.S.-based staff, it has come with its own set of unique challenges in that all of our franchisees operate in East Africa. Whether you currently have international franchisees or you are only now considering if it’s time to expand overseas, here are some best practices that have helped us establish a strong business model for Jibu.
RECOGNIZE THAT FRANCHISING MAY BE A FOREIGN CONCEPT It is important to remember that the concept of franchising is new to many countries, East Africa included. Because the concept is new and unfamiliar, it is important to build customer trust in the product. We have found that this is best done by word of mouth and customer referrals, as opposed to largescale advertising, which often can come across as foreign and intrusive as opposed to locally owned and operated, which is Jibu’s motto.
ESTABLISH A TEAM AND HEADQUARTERS OVERSEAS We could not operate effectively without our corporate offices, which also serve as flagship franchises, in Kampala, Uganda, and Kigali, Rwanda. Additionally, we have more than 150 employees throughout Africa, including our county directors, supply chain director, engineers and controllers. (Continued on page 38) FRANCHISING WORLD JUNE 2016 37
(Continued from page 37) These local team members bring invaluable business expertise, networks, language skills and market awareness that are key to our success.
Jones & Co.
www.jonesco-law.ca
UNDERSTAND THE CULTURAL, LEGAL AND POLITICAL HURDLES Being able to work closely with local governments, as well as advisory and approval boards, has been key to our success. The biggest challenge for Jibu has been managing our supply chain, which is closely tied with the legal and governmental situations in each country. Prior to having a supply chain director and team devoted to this challenge, we frequently encountered long and costly delays in getting equipment through ports of entry and across borders. We had filtration equipment held or “lost” for months in customs before finally being released to us.
ENSURE CHECKS AND BALANCES ARE IN PLACE Since Jibu is an L3C (low-profit, limited liability company), it is incredibly important that our franchisees understand that the brand’s profit must be aligned with our charitable purpose: to provide affordable, clean drinking water to underserved communities in East Africa. We have very specific reporting requirements and our board holds us accountable for the impact we make, from the number of liters of water sold and customers reached, to the number of jobs created and reduction in CO2 emissions. From our research, the top 10 percent to 15 percent of the population in East Africa can afford to buy purified water from supermarkets — meaning that the bottom 90 percent cannot. These middle, working and lower-class neighborhoods are the ones we need to serve and we’ve put checks and balances in place to ensure franchisees are serving the right people. In fact, we have had to make the difficult decision of removing franchise owners from our system for not abiding by our charitable impact mission as an L3C. We have learned that training is key to ensuring new franchisees understand our business model, as opposed to copying the commercial bottled water sector which primarily delivers to upscale neighborhoods, hotels and large retail centers.
AWARD OWNERSHIP GRADUALLY We have moved from a hub-only model to a hub-and-spoke model by developing a micro-franchise system. Micro-franchisees buy water at a discount from an existing franchise and resell it at a slight markup at small storefronts or kiosks. This model allows us to vet both the micro-franchisee and their neighborhood. Based on their performance and the market viability of the location they have selected, we are able to select our franchise owners from a pool of micro-franchisees who have, with a smaller level of responsibility, proven that they have a high likelihood of effectively managing a Jibu franchise.
Language Matters Legally Speaking Can you read your Chinese trademark? We can. We do more franchising related to China than all other countries in the world.
38
FRANCHISING WORLD JUNE 2016
Anne Welsch is relationship manager at Jibu. Find her at fransocial.franchise.org.
Franchising Gives Back Awards The deadline for the Franchising Gives Back awards is June 24. Submit your nominations at franchisinggivesback.org.
International Franchise Opportunities page 41
How to Spot the Ideal International Franchisee 20 Adapting Core Identities for the Global Marketplace
26 Analyzing and Selecting International Markets
29 Five Ways to Avoid Getting Stuck at the Border
32 Cross-Border Franchising: A First Look
FEATURES
Continental Divide: Growing an International Brand
Colorado-based Jibu, a 2015 IFA Franchising Gives Back Silver Award Winner, embraces the unique challenge of having 100 percent of its franchisees in East Africa. BY ANNE WELSCH
F
or years while living and working in Africa, Jibu’s founders, Randy and Galen Welsch, had watched efforts to bring clean water to Africa fail. While numerous charities and their donors had good intentions in addressing the drinking water crisis, many fell short and the infrastructure fell into disrepair. Randy and Galen realized that by giving local communities a stronger sense of ownership, particularly through franchising, they could establish a much more sustainable model that could help thousands of people in underserved communities across East Africa. Since our founding in 2012, Jibu has grown to 18 locally owned clean water franchises across Rwanda and Uganda, with an additional pilot that has launched in Kenya. While our growth has been rapid, especially given our small team of four U.S.-based staff, it has come with its own set of unique challenges in that all of our franchisees operate in East Africa. Whether you currently have international franchisees or you are only now considering if it’s time to expand overseas, here are some best practices that have helped us establish a strong business model for Jibu.
RECOGNIZE THAT FRANCHISING MAY BE A FOREIGN CONCEPT It is important to remember that the concept of franchising is new to many countries, East Africa included. Because the concept is new and unfamiliar, it is important to build customer trust in the product. We have found that this is best done by word of mouth and customer referrals, as opposed to largescale advertising, which often can come across as foreign and intrusive as opposed to locally owned and operated, which is Jibu’s motto.
ESTABLISH A TEAM AND HEADQUARTERS OVERSEAS We could not operate effectively without our corporate offices, which also serve as flagship franchises, in Kampala, Uganda, and Kigali, Rwanda. Additionally, we have more than 150 employees throughout Africa, including our county directors, supply chain director, engineers and controllers. (Continued on page 38) FRANCHISING WORLD JUNE 2016 37
(Continued from page 37) These local team members bring invaluable business expertise, networks, language skills and market awareness that are key to our success.
Jones & Co.
www.jonesco-law.ca
UNDERSTAND THE CULTURAL, LEGAL AND POLITICAL HURDLES Being able to work closely with local governments, as well as advisory and approval boards, has been key to our success. The biggest challenge for Jibu has been managing our supply chain, which is closely tied with the legal and governmental situations in each country. Prior to having a supply chain director and team devoted to this challenge, we frequently encountered long and costly delays in getting equipment through ports of entry and across borders. We had filtration equipment held or “lost” for months in customs before finally being released to us.
ENSURE CHECKS AND BALANCES ARE IN PLACE Since Jibu is an L3C (low-profit, limited liability company), it is incredibly important that our franchisees understand that the brand’s profit must be aligned with our charitable purpose: to provide affordable, clean drinking water to underserved communities in East Africa. We have very specific reporting requirements and our board holds us accountable for the impact we make, from the number of liters of water sold and customers reached, to the number of jobs created and reduction in CO2 emissions. From our research, the top 10 percent to 15 percent of the population in East Africa can afford to buy purified water from supermarkets — meaning that the bottom 90 percent cannot. These middle, working and lower-class neighborhoods are the ones we need to serve and we’ve put checks and balances in place to ensure franchisees are serving the right people. In fact, we have had to make the difficult decision of removing franchise owners from our system for not abiding by our charitable impact mission as an L3C. We have learned that training is key to ensuring new franchisees understand our business model, as opposed to copying the commercial bottled water sector which primarily delivers to upscale neighborhoods, hotels and large retail centers.
AWARD OWNERSHIP GRADUALLY We have moved from a hub-only model to a hub-and-spoke model by developing a micro-franchise system. Micro-franchisees buy water at a discount from an existing franchise and resell it at a slight markup at small storefronts or kiosks. This model allows us to vet both the micro-franchisee and their neighborhood. Based on their performance and the market viability of the location they have selected, we are able to select our franchise owners from a pool of micro-franchisees who have, with a smaller level of responsibility, proven that they have a high likelihood of effectively managing a Jibu franchise.
Language Matters Legally Speaking Can you read your Chinese trademark? We can. We do more franchising related to China than all other countries in the world.
38
FRANCHISING WORLD JUNE 2016
Anne Welsch is relationship manager at Jibu. Find her at fransocial.franchise.org.
Franchising Gives Back Awards The deadline for the Franchising Gives Back awards is June 24. Submit your nominations at franchisinggivesback.org.
