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International Transactions Clinic Helps Jibu Test Waters of Franchise in Africa

By Jenny Whalen
Feb. 11, 2015

When a Jibu​ franchise opens in Uganda or Rwanda—and provides a new community with access to clean, affordable drinking water—traces of that success are felt 7,500 miles away in the International Transactions Clinic (ITC) at Michigan Law.

The source of this shared sense of achievement is the social franchise agreement that ITC students have developed to facilitate Jibu's continued expansion in Africa.

"It has been not just a tremendous pleasure to work with the ITC, but essential to Jibu's success," said Randy Welsch, cofounder and U.S. CEO of Jibu. "We needed to get a social franchise agreement written properly and quickly to be used with our new franchisees who were launching water businesses in Uganda and Rwanda."

Knowing the clinic's reputation for providing top-notch transactional work to social enterprises, Welsch approached ITC Director Deborah Burand in September 2014 to inquire about becoming a client of the clinic. For Burand, the significance of this request went beyond day-to-day business.

"That Randy (Welsch) came to the clinic suggested to me that we have succeeded at our mission of developing world-class legal services for our clients," Burand said. "He didn’t come purely for the pro bono benefits. He came for our world-class service. It's a wonderful affirmation of the reputation that our clinic has been able to grow."

Jibu, which signed on with the ITC in October 2014, employs a business model that invests in local entrepreneurs. As the water sector's only incubator, Jibu seeks to supply its franchisees with the tools they need to launch independently owned water treatment, packaging, and distribution centers in African communities. These franchises in turn make quality drinking water convenient and affordable to the communities they serve.

"This is usually called microfranchising, which suggests a small investment for the franchisee," said David Koch, the project's supervising attorney and a 1984 Michigan Law graduate. "In most cases the program is sponsored by an organization that is trying to have a social impact of some kind. In Jibu's case, they are trying to get clean water to communities, but also to enable local people to build a business that is sustainable in places where it is often difficult to start one."

Key to the success of this mission is the strength of the relationship between Jibu, its regional developers (who are essentially country directors), and its individual franchisees. With this need in mind, ITC student-attorneys Sarah Fries and Megan Staub, both 2Ls, were tasked with drafting a social franchise agreement that would define each party's responsibilities and protect the Jibu brand.

"We wanted to build from the bottom, so we began drafting an agreement between the regional developers and the franchisees," Fries said. "Our supervising attorney, David Koch, has been amazing. He let us take the lead on each draft and has only stepped in to help us fine tune. In a clinic you can sometimes feel as though you're doing shadow work, but there was real pressure here to get the agreement done because Jibu was going to implement it in 2015."

With the first agreement—between regional developers and franchisees—now in Jibu's hands, the ITC team has started drafting a second agreement concerning the relationship between regional developers and Jibu corporate.

"Sarah and Megan are doing real work for clients that I probably wasn't doing until I was five or six years into practice," Koch said. "The opportunity to work with the client directly, to sit in a meeting with him and ask questions about business, social objectives, and how the two work together, is not something you normally get during law school. This is a rare opportunity and one that will give them a big head start in their careers."

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