Our journey: Scaling a social franchise solution for safe drinking water
In this blog post, Amandine Muret, Director of Strategic Partnerships & Advocacy, shares insights from 1001fontaines’ 15 years journey in Cambodia implementing and scaling a water kiosk model, leading to the achievement of a key milestone at the end of 2020: full recovery of operating costs.
Categories: Blog, Water to the Home
March 26, 2021
Our mission at 1001fontaines is to provide safe and affordable water to underserved populations in rural areas of Cambodia by setting up water kiosks that treat and distribute water through 20L containers. These containers are either collected at the kiosk, sold in local shops or home delivered.
Over the past 15 years, we have been pioneering and optimising this model, and we now have national level scale with 250 operational kiosks across the country. Over the years the model has demonstrated its resilience, its potential for scale and its economic viability – learning key lessons on the journey to scale and operational breakeven.
1. Strong local entrepreneurs are key to achieving operational and financial viability
Having seen numerous projects fail due to lack of local ownership and poor management, we decided to rely on social entrepreneurship to ensure long term sustainability of services.
Each water kiosk is run by a local entrepreneur from the community where the kiosk operates. An immediate challenge emerged as we were developing this model: how to build the skills of these entrepreneurs that have only basic education and no previous management experience?
We decided to develop our own in-house training course: the “Social Entrepreneur Academy”, which has been gradually improved and optimised over time. We believe we have now reached the right balance of on-site technical training (such as water purification), and classroom sessions on topics such as finance, sales and marketing and management.
For kiosks to become self-financing as quickly as possible, we also ensure that our professional sales team recruits at least 400 households as clients within the first week of a kiosk opening. We aim for new kiosks to cover all of their operating costs from day one by reaching the minimum target of 1,200L sold per day.
Thanks to this approach, 78% of the water kiosks launched since 2005 are now self-financing on an opex basis. The remaining 22% are actively supported by Teuk Saat (our operating arm in Cambodia) to improve their performance.
2. Our social franchise model helps deliver strong performance and generate cost efficiencies
Our water kiosks in Cambodia are run under a social franchise model. In exchange for a percentage of revenues, entrepreneurs benefit from a range of services that help them improve performance and deliver high quality services, including technical maintenance, water quality monitoring, and business support.
We have continuously worked on improving these tools and services to ensure we are supporting franchisees in the best possible way. Digital tools have been introduced to monitor the kiosks’ performance and logistical improvements have been made to supply consumables to the kiosks.
These changes have led to a huge increase in productivity: the aggregation of monthly performance data is now done within 13 days compared to 40 days before; on-site technical interventions now take place within 48 hours versus 1 week; and delivery of consumables now occurs within 2 weeks versus almost 2 months previously.
These productivity gains combined with the deployment of more water kiosks across the country are two key factors that enabled us to reach operational breakeven at the end of 2020.
3. Sustainability and scale require strong partnerships with the local community and the public sector
Adoption of these new services in rural communities requires change, both in local authorities’ approach to water service provision and in people’s water consumption practices. To foster that change our model relies on a tripartite partnership: the local authorities provide a license to operate and support with site identification; the entrepreneurs run and manage the kiosks on behalf of the public sector; and the water kiosks themselves are owned by the local communities, who establish voluntary committees whose members help engage and recruit customers.
To encourage adoption of the model on a larger scale we are also increasingly engaging with government at a national level: we have been for example working and coordinating with the Ministry of Rural Development to ensure consistency with the country’s national water strategy, and are intensifying our advocacy efforts to increase official recognition of the model.
The journey of 1001fontaines in Cambodia has taught us that social entrepreneurship, a franchise model and strong local partnerships have been the cornerstone of impact, scalability and sustainability.
With 258 water kiosks in operation, 825,000 daily consumers, and 100% of operating costs self-financed, we already have a significant footprint in the country which we are continuing to expand.
By 2025, our goal is to cover 100% of rural communes with 10,000+ inhabitants and phase out of philanthropic funding to self-finance further expansion. We are also seeking to replicate the model in other geographies, including in Madagascar, Myanmar and Vietnam.