Jim Penman, CEO Jim’s Group
How Jim Penman built Australian household name brand Jim’s Group, by changing the rules of franchising and putting his people first.
Great service is hard to come by. This eternal problem is what Jim Penman set out to solve when he started his part-time lawn-mowing business—and even though his business has since grown into a multimillion-dollar enterprise known as Jim’s Group, it’s still the core focus.
Jim’s Group was an unintentional empire, started by an aspiring academic back in the 1980s. Today, Penman’s company has almost 4,000 franchisees that provide over 50 services around the world. As a result, Jim’s Group has become a household name in Australia for all things home services.
Here’s how Penman grew his business from a humble mowing service to the largest franchise in Australia.
The Unintentional Founding of Jim’s Group
In the 1970s, Jim Penman was pursuing his Ph.D. in history at Latrobe University in hopes of joining academia. His plans changed, however, when he graduated in 1982 and realized he had little to no chance of working in academia: “My ideas were far too wild.”
At the time, Penman also happened to be operating a part-time lawnmowing business, as he made his way through the grueling grad school years. This turned into a full-time gig upon graduation. “It was something to do until my real business came along.”
Or so he thought. While he waited for his real life to kick in, Penman was excelling at his temporary one. He had a passion for making customers happy, which made it easy for him to attract and keep regular clients. “It was the biggest thing I had going for me,” he says. He also found success building and selling ramps (for transporting mowing equipment onto raised beds or platforms) to his customers.
As his business grew, he tried employing subcontractors, but he couldn’t find people who matched his quality of service. Then in 1986, necessity forced him to evolve.
Major competitor V.I.P. Home Services came to town. This was a turning point for Penman. “I simply franchised in self-defense,” he says. “Otherwise, they’d swallow me whole.”
For those unfamiliar, franchising allows other entities to use your company’s name, trademark, business strategies, and so on in order to share essentially the same products and/or services offered by the franchisor. Franchisees typically pay a licensing fee and a percentage of sales revenue to their franchisors. It’s an effective way to quickly expand a business without massive financial investment.
Penman started with about a dozen franchisees, most of whom were previous customers. But even as Penman expanded his business, his focus still remained on the short term. He truly had no idea his business would grow to where it is today.
“When people asked me how I thought might go, I said, ‘If it’s really successful, one day I could have as many as 100 franchisees,’” Penman says, laughing. “That was my reach goal. Now, I have just under 4,000.”
Franchising Jim’s Group to 4,000 Strong
When Penman was a contractor, he had one simple idea: He wanted to make customers into raving fans. “I wanted customers to be so delighted that they’d recommend me and use me forever.”
That was the core concept of Penman’s business, and when he franchised, he had the same concept for his franchisees.
With that in mind, he developed a contract that would catch the eye of any prospective franchisee. His goal was to make it so enticing that potential owners would be “mad not to join the system.” Penman even got ahold of a competitor’s contract to better understand how he could make his more favorable.
For example, he promised his franchisees that he wouldn’t take regular clients from his franchisees without their consent (unless a customer complained). He promised territory rights—meaning he couldn’t give any client in their area to anyone else, but they could take work wherever they wanted. Penman also promised an automatic right to renew.
“This was all really strange stuff,” Penman says. “One reason it took nine months to get the contract done was because the lawyers kept arguing with me.”
They thought he was being way too nice and that the contract was unreasonable and extreme. They encouraged him to “soften it down,” but over time, he actually provided his franchisees more rights. These included the right to move to another regional franchisor, to walk away from the franchise for a small exit fee, and to vote out their franchisor.
At every stage, Penman put his franchisees first. In his opinion, the secret to looking after your customers is having a great staff. The same thing applies to great franchisees—you make them the actual first priority.
“There’s nothing particularly clever about what has done,” he says. “It’s more how we do it that matters. The way we treat our franchisees, how we maintain quality, how we make sure they’re looked after, that they’re happy…that’s the innovative part of the system.”
As you can imagine, Penman’s franchisee selection process is quite rigorous. With such a favorable franchising package, many people apply, but few are chosen.
“We are very selective,” he said. “Unless I’m convinced they’ll succeed, I don’t accept them.”
When interviewing franchisees, Penman looks for a handful of key attributes: Good character, a concern for customers, reliability, and basic decency. He takes each interviewee on test drives to watch them perform their service. He also never accepts anyone who is not putting up their investment money themselves.
“To run a successful cleaning or mowing, you don’t have to be a genius,” Penman said. “You have to be somebody with good character.”
Expanding the Jim’s Group Services
In the first few years of his business, Penman didn’t just expand through franchising. He also began adding different service divisions.
With a successful mowing system in place, Penman considered how he might apply his approach to other services, such as cleaning. He created a separate cleaning brand called SunLite and sold a couple of franchises. That avenue failed completely.
Penman liked the idea of expanding under the Jim’s Group name, but he didn’t think it’d be successful, because the brand image was so vastly different. Who’d hire a cleaning service with a brand image of gardening and mowing?
Well, a lot of people did. Penman added a cleaning division to Jim’s Group and found that the familiar brand name actually helped grow his new business.
Penman continued expanding under the Jim’s Group brand to include services such as dog washing, computer services, bookkeeping, and roof repair. Today’s Jim’s Group has 52 divisions, and the company cross-sells through a client newsletter with about 500,000 recipients.
“The brand just works far beyond what you think it would,” Penman says.
When asked about how he manages such a wide variety of services, he says, “There’s no real difference between mowing and cleaning and dog washing. The basic issue is the same: Follow up on a lead, respond quickly, turn up on time, provide a reasonable quote, and satisfy the customer.”
To Penman, it doesn’t matter what the service is. His goal is getting everyone to do provide consistent, high-quality service.
Still, Penman is always making tweaks to Jim’s Group to constantly improve that service. For example, Jim’s initially offered a flat rate fee system to its franchisees. Over time, Penman learned that franchisees weren’t always following up on leads. In fact, a survey found that 25 percent of client leads never received a follow up. Penman changed the fee system to reflect a lower base fee and a separate charge per lead. After that, the number of leads not being followed up on dropped to just 3 percent.
Penman also made recent changes to the Jim’s Group complaint system. In the pre-franchise days, Penman would see approximately 100 complaints for every 100 leads. After franchising, that number dropped to about five complaints.
However, Penman wasn’t satisfied with 5 percent. To fix the issue, he went to his regional franchisors, who manually receive these complaints. The team decided that every time a complaint comes in, the franchisor would alert Penman and the respective franchisee. Then, the franchisor would call the franchisee to better understand what happened and how to solve it.
Today, Jim’s Group has an automated complaint system. If a franchisee gets six complaints within six months, they receive a warning letter. Another six, and the franchisee has to attend retraining. They’re now down to just 1 percent, and working to cut that at least in half.
In a world full of new ideas, how does Penman stay focused on Jim’s Group? “You might think we do 50 different things, but as a national franchisor, I do one thing: I provide a service. Jim’s Group is a very focused and limited company.”
With almost 4,000 franchisees, it’s even easier to provide global services. Today, the company also benefits from a much more sophisticated software and a wide variety of resources for franchisees.
Beyond Jim’s Group
While Penman continues to expand Jim’s Group, he never forgot his original passion: research. The only difference now is that he can afford to really pursue it.
Until his academic career stalled, Penman never considered becoming wealthy. “I’ve never been that interested in money,” he laughed. “I’m notoriously stingy. I go around the house and office turning lights off.”
But now he’s able to use the success of his company as a vehicle for funding, so he can dedicate more time and resources into continuing his research on the epigenetics of social behavior. He believes this could help in the treatment of mental illness and addictive disorders.
Valuable Advice to Franchisors
In Penman’s opinion, many people have a misleading idea of business. They think they must have a breakthrough or a big idea to be successful.
“It’s not the brilliant ideas,” he said. “It’s thousands of little ideas. Every day I say, ‘How can I do this better?’”
Penman encourages anyone who wants to grow to focus on yourself before considering franchising. “If you don’t do it well, there’s no point in franchising, because you don’t have anything to teach anyone else.”
He encourages entrepreneurs to build a brilliant business, then, master a working model that you constantly change to make better.
Penman also believes in a people-first mindset, instead of money first. He encourages people to ask themselves: What’s the long-term interest of the people I’m dealing with? How can I make my customers and franchisees into raving fans?
“Every day, I’m asking myself the same question,” Penman says.
Finally, he recommends keeping in touch with the grassroots. Every single franchisee has Penman’s personal number and email. “I get multiple contacts a day,” he says. “I’m always listening to what’s going on. I also read through most complaints.”
After all, it’s the thousands of little things that count.
- Penman’s journey from being an aspiring academic to unintentionally starting Jim’s Group
- Why the arrival of a competitor pushed Penman to franchise his brand
- The importance of running a customer-centric business
- Why lawyers were not fans of Jim’s Group’s franchisee contract
- The reason Jim’s Group started to expand to different service divisions
- How Penman’s success as an entrepreneur helped him circle back to his original passion
- Penman’s most valuable advice to aspiring franchisors
Full Transcript of Podcast with Jim Penman
Nathan: So the first question that I ask everyone is, how’d you get your job?
Jim: Not by intention. I went to university back in 1971 with the aim of working out why sterilisations rise and fall of all things. So I went and did a History Degree and then a PhD and my whole aim was to be an academic, and lawn mowing was my part time student job. And when I finished up in 1982 I realised that I had 0.0% chance of any kind of academic post, because my ideas were far too wild. So I decided to turn my part time mowing business into a full time job.
Nathan: Yeah, wow. Incredible. And you know, if you fast forward to now, you know Jim’s Group is, you know, the largest franchise in Australia purely by numbers-
Jim: Not by turnover though, McDonald’s and stuff do a bit better than us, by numbers-
Nathan: But incredible feat. Like you know, the Jim’s Group is, is an iconic brand. Like when Joel reached out to us to do this interview, I was really excited because you know, everyone knows the Jim’s Group brand and you’ve got over 50 different services that have been franchise.d So I’m curious around anyone that’s watching this, how did it all start? Like what you started, you started doing the lawn mowing. What, what happened next?
Jim: Well, none of this was intentional. This was, when I started mowing full time, I had no idea this was going to be anything particular. This was sort of some something to do until you know my real business came along.
Jim: And I started off by, well I was mowing lawns and I didn’t know what I was doing, but I had a big passion for customers. That was the biggest thing I had going for me. So I used to find it very easy to pick up and keep regular clients. And I figured out after a while that it was more money in building up and selling lawn mowing rounds, than there was in doing anything else. I had tried employing subcontractors and difficult to get the quality right and so forth. So I started building up and selling lawn mowing rounds. And, again that was a short term thing, no long term intentions. And about 19, when was, 1986 I made your competitor a franchise lawn mowing business came to Melbourne. That was VIP.
Jim: And to a large extent I simply franchised in self-defence, otherwise I thought they’d swallow me whole.
Nathan: Ah interesting. And you know what happened next? You decided to franchise, was it easy to find other franchisees or-
Jim: Well I’d been selling lawn mowing rounds for quite some time, so I had a lot of people who I knew.
Jim: So when I actually launched, my first franchisees were people who bought lawn mowing rounds off me in the past, that I knew they were good, some of the good ones.
Jim: And I’ve been in contact with them, and some of my best subcontractors. So I had about a dozen to start with and then I started going from there. And honestly I didn’t really understand what this thing was. When somebody asked me at that time, how do you think it might go? And I said, “If it’s really successful it really works well, one day I could have as many as 100 franchisees.” That was my reach goal.
Nathan: Yeah, there you go. And you’ve got I think 5000?
Jim: Just under 4000 yeah.
Nathan: Okay, just under 4000 okay, interesting. And when it comes to, I guess anyone that is watching this and they might have a service based business that they’re looking to franchise, they have something that is unique enough in the marketplace that they think that they would like to license their brand and turn it into a franchise. What is your recommendations there? Where to get started?
Jim: Well, first of all there’s nothing particularly or unique about what we’ve done. Our services are mowing, gardening, cleaning, dog washing, very basic thing. There’s nothing particularly clever about what we do. It’s more, how we do it that matters. It’s the way we treat our franchisees, how we maintain quality, how we make sure that they’re looked after, that they’re happy. That’s the innovative part of the system.
Nathan: Interesting. And talk to me like around that system ,for your first five franchisees, what did that system look like? You know, because I think that’s one thing that is very inherent of some of the best businesses out there, they have incredible systems, operational processes. You guys are obviously a master, like masters of this and and being able to basically put your, like your business in a box with a nicely tied bow. Can you talk to us around that?
Jim: Okay. In the beginning, our systems weren’t particularly strong, what we do now is many, many times more sophisticated and complex than what we used to do in the beginning. I had really one simple idea, when I was a mowing contractor, my fundamental idea was, I was going to make my customers into raving fans. I wanted my customers to be so delighted, they’d use me forever. They recommend me to their friends. They pick up their neighbours. So that was the concept of my gardening business. When I wanted to franchise, I had the same concept with franchisees. My whole idea was to turn my franchisees into raving fans. So what I did was develop a contract that I thought was the most favourable that it possibly could be to any prospective franchisee.
I wanted a contracts so good, you’d have to be mad not to join the system. I got hold of the contract from my competitor. I look at it, I said, “No, that’s not fair, that’s not right.” So I put a whole lot of clauses in giving my franchisees protection. For example, I told them I will not take regular clients off you without your consent, unless the customer complaints. I will give you territory rights. You get right a first refusal, for any client in your area, in your territory, I can’t give it to anybody else, but you can take work wherever you wish. You can build your business to whatever size you wish. When you come to renew, you got an automatic right to renew.
Now, this was all really strange stuff and actually one of the reasons it took me nine months to get my contracts done is because the lawyers kept on arguing with me. They kept on saying, you’re being too nice. Why you giving all this stuff to your franchisees? And what they essentially said to me is that this is so unreasonable, this is so extreme. You’re going to have to soften it down. But actually what happened is as time went by, I actually gave my franchisees more rights. For example, I gave them the right to move to a different franchisor if they weren’t happy.
Jim: Basically to walk away from the business if they weren’t happy, most pay a few thousand dollars-
Nathan: And no exit fees?
Jim: No exit fees, well very small, $4000, which we don’t normally charge and most radical of all the right to vote out their franchisor, which is completely unprecedented in the world. So we’ve done all this really radical stuff. And strange thing is what it means is that at every stage of the business, you’ve got to look after your franchisees.
Nathan: Yeah. So when it comes to that, what was the outcome? Was the outcome because of these, you know, things that you’re doing for your franchisees that the was always really happy and they’re always happy to come back, or-
Jim: The secret of looking after customers is to have good people. Like if you want to look after your customers in any business, you’ve got to have great staff. You’ve going to have staff who believe in what you’re doing. Well, the same thing with franchising, if you want to look after your customers well, you’ve got to have great franchisees. Which means our actual first priority in Jim’s is not clients, it’s franchisees. We say our first priority is the welfare of our franchisees.
Nathan: And what do you look for in a franchisee? Do you have a rule book?
Jim: Well, first of all, one of the unusual things we do, which is not common in franchising, service franchising in Australia, is we are very carefully selective. In fact, when I talk to franchisor, my first hour and a half is talking about why it’s so crucial to be selective and to knock back people that you’re not … unless you’re convinced they’ll succeed, you should not accept them. And then we go to how we select. Now in reality, to run a successful cleaning or a mowing business, you don’t have to be some, you know, all time genius entrepreneur.
You basically need to have a good character, be able to follow the system, have a concern for customers. Just be decent sort of person, fairly steady, that kind of thing, but we would look for things like, first of all, we take them out on the road. That’s the best test of all. We look at how they do it. Do they follow instructions? Can they … like if you’re mowing the lawn for example, you don’t just go around in circles. You go around the edge and then you go up and down straight lines. Now if you tell a prospect that a couple of times, if they’re not doing it by the end of the day, you fell them.
Jim: You’ve got to move the hose, you coil the hose in the garden. Don’t just mow past it. If they’re not doing that, then you fell them. If they don’t turn up on time or if they come in late and they don’t apologise, you fell them. So you look at that sort of thing. As far as the interview is concerned, we’ll look for a supportive partner. Very important.
Nathan: Ah, spousal buy-in, very smart.
Jim: We would not normally except somebody who hasn’t got a partner in support. We would not accept somebody who’s not putting up the money themselves, like it’s a father’s putting up their money, that’s an almost certain failure. We look for somebody who asks good questions. See we’re not asking for somebody who could run a McDonald’s outlet, that’s a different level of business.
Jim: But just somebody with good character. And most of our franchisees, would tend to be from sort of the middle to the upper end of the employment market. So it’s not that hard. You just got to recognise the ones that really won’t fit.
Nathan: I see. And at what point did you start to move into different verticals?
Jim: Different divisions?
Nathan: Yeah sorry you call it-
Jim: We call it divisions-
Nathan: Okay, sorry.
Jim: Well I guess it sort of explains the, you know, I’m gonna ruin people’s idea that I’m some genius entrepreneur because that was, that was almost by default. What actually happened was when I had this system set up for mowing, my thought was, okay, well I’ve got these contracts, and this system, and it’s ways of delivering work and so forth. So why not apply it to cleaning? But obviously, this is a garden, looks like a gardener. That’s what it looked like. That’s me actually. That’s a picture of me.
Jim: All right. So obviously that wouldn’t work for cleaning clearly. So what I did was I set up this other brand called Sunlit, little sprays and things that look like cleaning. Sold a couple of franchises. Failed completely, couldn’t make it work. All right. Somebody came to me and they said, “Okay, I’d like to do Jim’s Cleaning.” And I said, “No, you don’t want to do that”, because it’s a gardening image. And they said, “It’ll work.” And I said, “No, it will not work. It’s a gardening image you couldn’t possibly work for cleaning.” And they say, “Well, we’ll give it a go. We’ll do it.” So I said, “All right, well if you do it and you take the risk on it, well have a go.” And it works. So I was wrong.
So … and people would look at the, the somebody would come in to talk to a real estate agent and say, “I’m from Jim’s Cleaning.” And they’d say, “Oh yeah. Oh, Jim like the … Oh, okay. All right.” So you can see the reaction, somehow the brand crossed itself, and that applies to anything. It’s funny that this gardening image actually seems to work for, you know, women who turn up to wash your dogs, or bookkeepers or computer. The brand just works far beyond what you think it would.
Nathan: Yeah. No, it’s interesting. So at what point in time, how long did it take before you launched your first division? After Jim’s Mowing?
Jim: Would have been a couple of years.
Nathan: Oh really? Okay.
Jim: Two or three years. I’m not sure exactly, about 1992 I think about, sorry. Yeah, about that.
Nathan: Yeah. And was it hard to maintain the consistency across all the different divisions as it grew, around, I guess, keeping the customer happy and the quality of the product or the service?
Jim: The point is, there’s no real difference for being mowing and cleaning and dog washing, and computer services and and antennas and book … There’s no difference at all.
Jim: The basic issue is the same. You’ve got to, what we do is we make it a lead through is actually allocated by the computer because the computer, the system knows who needs work and where. So we’ll know that there’s four people taking a job in Doncaster and we will pick one of those if it’s a territory holder first and others. So that’s all the same. So what you’ve got to do for a franchisee, you’ve got to follow up that lead, you’ve got to find the client back quickly. Every minute that passes by delays, it makes it less chance you’re going to get the job. So follow up quickly. You ring them back. If you can’t get through, you’ve got to send a text, these days with mobile phones. You got to turn up when you say you will, give a couple of hours leeway, then you’ve got to give a quote, a written quote, then you’ve got to satisfy the customer.
So it’s pretty, it’s pretty simple. It doesn’t really matter what the service is, the basic problem is getting people to do all that consistently. And obviously in the start we were better than we had been, because we had systems of … like I introduce systems, like for example, one thing I found was that people weren’t always following up leads. So we used to have in a sense a flat rate fee system in the beginning. And we found that people were just ignoring leads. They would get so busy that they would say, “Oh I won’t bother with that.” So what we did actually change the system of charging for jobs.
So instead of having a flat rate fee, which is what most of our competitors still do, we have a lower base fee and we charge for every lead, whether they get it or not. And we did a little survey, we had some people on flat rate fees and some on these new fangled lead fee ideas. And we’ve found that when there was a no lead fee, a quarter of the clients we rang hadn’t been followed up. When there was a lead fee, 3%.
Nathan: Yeah. I See.
Jim: And what we actually found, when you looked at the conversion of the lead to the job, for the … when there was a lead fee, we’re converting about three out of four, which is about what we do.
Jim: But for the flat fee it was less than half. So we were getting one eighth as many customers unhappy and 50% more actual jobs from the same volume of leads, simply by changing the way we were charged fees.
Nathan: Yeah, interesting. So still quite data driven.
Jim: Very, very data driven. And what we then started to do was to look at ways of going beyond that. So for example, one thing we look at in Jim’s is complaint rate. That’s the number of clients that complain. Now in a pre franchise days, I can remember looking, when my had subcontractors, they weren’t very good. Okay. Other than for every hundred leads we get approximately 100 complaints. Now when we put the franchise system in place, we obviously selected a lot more carefully and we were, you know, we were talking to them about things and we were training them and doing all kinds of things to improve this. And then there was the lead fee system, we found that it actually dropped quite quite well. We were down to 5%, so for every hundred leads, five complaints.
But I said that’s not good enough. That’s not good enough. And I actually noticed it too because the complaint rate wasn’t showing that, but I was taking a lot of calls in the office and I noticed that I was taking more complaints than anyone else. They weren’t recording the complaints strictly enough. So I got all the staff to do that, and then I discovered this 5% figure, and I said, “This is not good, this is still too high.” So then we started putting systems into place and the first thing after talking with my franchisor, because Jim’s has got regional franchisors to look after franchisees. I went to them and said, okay this … actually it was their suggestion. Every time a complaint comes in, we’re going to send not just to the franchisee, but to you as the franchisor, your job is to ring the franchisee and see what happened.
And then that then generates a conversation and the franchisee gets into problems. And that improved things a bit. Then we started recording complaints, and we started the system, which is now heavily automated, where if they get a certain number of complaints, which is six complaints within six months, that at least 6% of leads, they get a warning letter. And then if it happens again in the next six months, they get a breach notice, and they have to attend retraining, and then every complaint gets sent to me. So you put into place and they continue to get complaints, they get terminated.
Nathan: So similar like how Uber, how they score.
Jim: Yes, very much so. And and just a few years ago, we also started doing customer surveys, which is automated mainly by SMS. And about 30% of our customers respond. And then we record that as well. Now the actual level of complaints now is it just a fraction under 1%. So in other words about a 99% improvement in complaints, and we are putting some stuff together at the moment to do with IT. I am convinced we can drop that at the very least in half, we can improve what we do.
Nathan: Interesting. So when you decided to launch the other divisions, did you do much cross selling, because you know that would raise overall, even though this is a franchise and you’ve got many franchisors and franchisees, it would raise your LTV of lifetime value of a customer. Did you do any, like do you do right now, or did you back then a lot of different cross selling and-
Jim: Well the question is how you can cross sell, because bear in mind the person who comes out to clean your house is a cleaning franchisee. These people aren’t high level entrepreneurs. They’re good people, they’re sensible enough in business, but they’re the kind of people that probably wouldn’t naturally run a business successfully themselves. I mean, there’s some interesting stats on businesses. I just looked up there’s a, it’s a organisation in America called the International Janitorial and Cleaning Services Association.
Jim: And their estimate is that 95% of people fail in a cleaning business in their first year.
Jim: With us, the relevant figure is around 11%. So these are people on the whole who probably wouldn’t be successful in business without our help, but because of the training, because of the leads we give them, because of the ongoing support, and the meetings and everything else, they tend to be successful.
So it’s, I guess it’s a long way of saying is the people that, most of the people who do, some of them are absolutely brilliant. There’s no question. Some are natural entrepreneurs, most of them aren’t particularly sophisticated. So they’re not going to, a person who comes to clean your house is not going to upsell to the mowing or the dog wash, or the antennas on the whole. Sometimes they’ll establish relationship with somebody that they know, in another division, but usually they don’t cross sale. The only way we really cross sell is we have a client newsletter which goes to about half a million Australian households every month, and that just soft sell, promotes the different divisions.
Nathan: Got you. I’m interested around your thought process or what your thoughts are around the concept of focus. You know, a lot of entrepreneurs, they have what is called Shiny Object Syndrome. You know, you’ve built an incredible brand and often when you do build a great brand, it’s only natural that you want to, you know, bolt on another product or service, and sometimes you can find yourself having so many different products or services and you forget what the core is and it’s so difficult to be good at so many different things. You know, you guys have over 50 different divisions, 50 different services, 50 different franchisors, thousands of franchisees. Like what is your thoughts on that, on that idea?
Jim: Well, it’s kind of misleading in a way, because you think that we do 52 different things, but we don’t actually as a National Franchisor, I do one thing. A client rings up, they want a service done, we want to provide that service. Essentially, it doesn’t make any difference what it is. It’s actually, the more people you have, the easier it is. See, for example now that we’ve got nearly 4000 franchisees, we’ve got much, much more sophisticated IT systems. All the systems I’m talking you about, about complaints and surveys and all this kind of stuff, is possible because of our sheer size.
We can have a training course for franchisors which we run every six weeks, where we train our franchisors how to be leaders. We have all kinds of resources. We actually are very focused, limited company. We don’t do a lot of stuff, and the times when we’ve tried two different things or a good example is we’ve set up a factory to make trailers for our dog wash division, quite frankly it was a disaster. It lost money for about two years, and it had problems with quality and all kinds of things. And eventually I handed over to my wife who’s a builder. And, and she now handles it very efficiently. You see, we’re not very good at doing things that are out of our core mission area.
So I guess the answer to that is we really focus very, very hard from the beginning. We don’t get involved in site-based franchise. We tried it once with health clubs. Never again, we don’t understand that. We don’t understand manufacturing. We don’t understand anything else apart from what we do. So we are an extremely focused business.
Nathan: Interesting. That’s great to here. So talk to me around, you know, one thing I found interesting is, with Jim’s, you actually use this as a vehicle. You know, the profits that are generated from this business, to put back into your real passion projects. I’d love to hear about that because a lot of people would find this interesting. You’re using Jim’s as a real vehicle to fund other business activities. You know, whether, yeah. So just I’d love to hear.
Jim: Well until my academic career failed. I never for one minute ever thought of becoming wealthy. I never had any interest in money. I’ve always been simply, I’m notoriously stingy and I go around the house, turn the lights off in this kind of thing and the office too. So I’ve never had an interest in money as such. But as soon as this happened, I knew I needed a lot of money. The point about my research is this, I started off trying to understand how civilizations rise and fall. Why they do? That was my key question, you know, why did the Roman Empire collapse? Could it happen to us? What was going on? And what I determined was that the key was character, was personality, wasn’t some vast, impersonal, economical or political force. People changed. And what I realised after a while, and I started looking at cross cultural anthropology and zoology and biology, was that this, these changes in character had a biological basis.
So I started off doing a PhD in History, and then ended up with something that really needed to be tested in the lab, with … basically with chemicals and rats and this kind of thing like that. So it’s a totally different fields. So what actually happened, and that was my dream. And while I was doing this and building my business and often very busy, I would get up at like five o’clock in the morning and I would be writing and working on this. So I’d take a day off and go down to Monash library and research on primates and this kind of thing. So I was always interested in that. And about 10 years ago, I had enough money, at last, and then I just went round and I approached a academic at La Trobe University, and I said to him I want to fund some research, basically into rats, and what I want to do essentially is to mildly limit the food intake and look at the changes in behaviour.
And what we’ve found over the years is some dramatic changes in behaviour that can result. And we’ve worked out ways of actually changing that. And even though, as I said, the original research was all about civilizations, what it actually in practise means, is that we can look at ways of curing people from things like addiction and mental illness and so forth, and this some very, very promising stuff. We’ve got pheromones, for example, we’re using pheromones with dramatic effect. We can actually improve maternal behaviour, make rats more hardworking, more exploratory.
And we’re also looking at the epigenetics, which wasn’t around back in the 70s when I did my PhD, but we looked at the epigenetic changes then we’re looking at using CRISPR to try and duplicate those. So essentially it’s something that could, it could change human history in a quite radical way. It could be the fundamental answer to things like mental illness and even poverty for example. Ways of helping people to live better and more productive lives
Nathan: Yeah. Well that’s fascinating. So if this is such a passion project, why do you not get a CEO in the business and then you can go full time on, on your research?
Jim: Well, I’m not a researcher, I’m actually at this present time, we’re just starting to look for someone to head the research full time. Somebody with a background in epigenetics, somebody who understands CRISPR and so forth. But really it’s not my field. I’m not a biological scientist, I don’t have an area like that. I know what needs to be done. I would tell Professor Paolini, who’s running the experiments, I want you to, you know, do this, I want you to take the bedding from the rats that are then put the other rats and do this, and he’d sort of do this stuff and go, “Oh Wow, this stuff works. This is amazing.” So at that level, I can do it. But in terms of actually running the research, it’s not my skill. And I don’t know if I have any particular skills, but if I have any abilities it’s probably better directed towards running Jim’s Group and trying to make that more and more profitable. Which it is, of course.
Nathan: Yeah. Interesting. So look, we have to work towards wrapping up. I’m curious around what kind of advice would you give to somebody that has a service based business and they’re looking to franchise perhaps, and it’s still early days for them. What would you say if you wanted to … if you know someone’s watching this and they want to get into, you know that’s a way to to scale to grow.
Jim: People have a very wrong, false idea about what business is about. There’s all this idea you’re going to have some brain wave, some idea, some breakthrough like the Zuckerberg things, setting up Facebook, this kind of stuff.
Jim: To me, that is quite misleading. When I look at my career starting out from a part time gardening business, and I originally used to charge a $1.50 an hour to do gardening, I’ve gone … and it’s continuously from there to here. It’s not brilliant ideas. It’s thousands and thousands and thousands of little ideas. Every day of my working life I’d say, “How can I do this better?” And I would say to anybody who wants to grow their business, franchising is just part of the process. To get to where you can franchise, you’ve got to have a great business model, because if you don’t do it well, there’s no point in franchising because you haven’t got anybody to teach anybody else.
The first thing if we look for a franchisor is, how much money they’re making, have they got great customer service. Do they like helping people? So you’ve got to have a great person. So if you’re looking at franchising, first of all, you’ve got to have a brilliant business. Then you’re going to set up a model and then you’ve got to constantly change it and change it and change it and change it to make it better. Particularly, I believe for franchisees, and I’m a great believer in franchisee focused businesses. I think if you look at the money first, in any sense, whether you’re talking about clients, or whether you’re talking about franchisees, you come completely unstuck. You’ve always got to make the decision to say what’s the longterm interests, to people I’m dealing with?
How can I make my customers into raving fans? How can I make my franchisees into raving fans? And if you do that, you just get quite unexpected results. But every day of my life, every day I’m asking myself the same question, and also I would say to anybody who wants to be in franchising is keep in touch with your grassroots. Now every, we’ve got nearly 4000 franchisees, every single one of them has my direct mobile number and my email address and they contact often. I get multiple contacts a day from franchisees. All kinds of reasons about complaints, about advice, about problems with their franchisor, all kinds of things. Everybody can reach me really simply. So I’m always listening to what’s going on.
Nathan: I love it. Couple of last questions. I have to ask you about brand building, cause you know Jim’s is an iconic brand in Australia. Everyone knows it. How’d you do that?
Jim: Well, once again, no great foresight. I know people can spend millions of dollars searching brands. The way it happened with me is that when I used to do leaflets and when I was, Jim’s Mowing was Jim mowing, I used to find if I put my photo on the leaflet, it actually got a better response. So when we franchised, well you can’t put a photo on a uniform. So I got a graphic artist to do up a design of my face. Okay. And we actually, the hardest part was working out the right littering. We use the Jim, which is a particular kind of type. And it was put up around the office to see which was the most, I asked the girls to look at it, which is the most easy to recognise and the quickest to read.
And look, I suppose, you know, we might’ve spent 50 or 60 bucks developing the logos. And later on some of my managers said we need to update the photo a bit. So they got in one recent photo of me actually one smiling, which is pretty hard to do and they changed it, but essentially very, very little thought we into it. I think it was focused too much on the brand. It’s the service that counts. Are you looking after your customers well? Are you looking after your franchisees well? And if you do that, the brand will stand for quality.
Nathan: Yeah. Amazing. Look, last question. Where’s the best place people can find out more about yourself and your work. I know you’re actually just about to release a new book. Would love to hear about where people can find out more in a little bit about the book and yeah?
Jim: Well a recent biography has just been launched. If anybody wants to find out all about myself and Jim’s, www.jims.net. And if anybody wants to email me, I’m very easy to contact. Just email [email protected] I’m also very open to the public people. People write to me at all kinds of things. As long as they email me, I can respond very fast.
Nathan: Awesome. Well look, thank you so much for your time, Jim, this incredible interview and I really appreciate your time.
Jim: You’re welcome.
Key Resources From Our Interview With Jim Penman
- Check out the Jim’s Group website
- If you want to reach Jim himself, you can send him an email at [email protected]