Franchisor Profile: Jim's Group
This article appeared in Issue 3#2 (January/February 2009) of Business Franchise Australia & New Zealand
The Accidental Businessman
The branding of a bearded ‘Jim’ wearing a bucket hat is an Australian icon. Jim Penman, founder of Jim’s Mowing, talks about his eccentricities, a simple lifestyle and stumbling into business.
Initially established as a one-man business in 1982, Jim’s Mowing has since matured into the Jim’s Group, with 25+ individual Divisions that are constantly expanding.
In addition to Australia, the Jim’s Group operates in New Zealand, Canada and the United Kingdom. Its ongoing success largely depends on maintaining quality people and treating franchisees as clients.
Jim Penman continuously strives to improve everything and everyone in his life, whether that’s managing his multi-million dollar company, educating his nine children or unstacking the family dishwasher.
He confesses, “People do find me difficult to get on with – why do you think I’ve been divorced? I wouldn’t say I was comfortable to be around – most people find me fairly obsessional. I’m always pushing people to do things differently or better.
“I try to be a good employer. We’ve got a lot of long term, great employees here, and I certainly recognise those who do the right thing. But my business is a reasonably tough environment: if people don’t perform, they’ll go.”
Jim is also a self-confessed recluse with poor social skills and limited interest in small talk. Before Jim’s Mowing, he attempted various jobs, mostly in sales. “I tried to sell encyclopaedias but I didn’t actually sell any”, laughs Jim. “I’m not very good with people really.
“I don’t have a lot of friends. I see my family, that’s about it – and business. I’m very introverted. In business you’re better off making connections and networking, and I’m terrible at that kind of stuff. You just learn to act in a certain way I suppose.”
Jim admits, “The only reason I went into the mowing business was because it was all I knew how to do. I just stumbled into it.”
That ‘stumble’ has resulted in around 2,733 franchisees within numerous Divisions offering services such as antenna installations, bin cleaning, bookkeeping, building maintenance, cleaning (general, carpets, cars and windows), computer services, dog washing, fencing, financial professionals, flooring, graffiti solutions, gutter maintenance, painting, paving, pergolas, plumbing, pool care, roofing, skip bins, test and tag, tree maintenance and windscreen repairs.
“A division could be just one person”, explains Jim. “There are probably around 20 that would have at least 10 franchisees. The latest survey discovered that the average franchisee is turning over something like $1,600 a week.” Jim estimates total franchisee turnover to be in the vicinity of $250 million.
He explains the basic structure of the Jim’s Group: “You have franchisees that do the work. You’ve got franchisors that look after the franchisees – recruit, support, advertise and so forth.” In franchising, these ‘franchisors’ are often referred to as ‘master franchisees’.
For example, Jim’s Mowing would have around 50 franchisors looking after particular localities. “Then you’ve got Divisional Franchisors who look after different Divisions (Fencing, Antennas, etc) and then a national level, which is my company”, explains Jim.
With 100% control of Jim’s Corporation Ltd, the 56-year-old explains he doesn’t earn as much money as people might imagine, “Actually our profit would be well under 1% in terms of what our franchisees make.”
Business and sales were never Jim’s ambitions. “I wanted to be a writer when I was a teenager - to write science fiction. That’s one ambition I’ve never fulfilled, that’s for sure”, he laughs. “I spent a lot of time trying; I suppose it improved my writing style and taught me how to touch type.
“I had various ideas to be a doctor and then a vet, because I liked animals so much. I worked with a vet for a while during the holidays, and then I was interested in research and wanted to find out what makes civilisations work – why they rise and fall – that was my big passion.”
Jim’s first major investment was a lawn mower. During university in the mid to late 1970s, he paid his way mowing lawns. “I was working for about $3 an hour in those days. I just felt if I could quote on the lawn, I could get a lot more per hour. My first slogan was ‘Most lawns $5’. I figured if I could get through two lawns in an hour, I could make ten bucks, which was a fortune in those days!
“My first house was in Eltham, just down the road from the Eltham pub”, says the tea-totalling Jim. “It cost me $30,000 and I bought it as a student – mostly from my lawn
mowing - but I blew it all down the track in various ways.”
Reflecting on 1982, Jim confirms he was a disappointed academic with a $30,000 debt, who desperately needed an income. He had completed a PhD in history, and studied anthropology and zoology, but his thesis had been rejected.
“I was a miserable failure by the time I was about 30”, admits Jim. “But I believe people are captains of their own ship. You just make a decision you’re going to start again and do it properly this time. Anybody can make that decision at any age of life.
“There’s never been a year that I haven’t had a gardening business of some kind. I’ve been gardening since I was 8 - that’s all I knew how to do that would make any money.” It cost Jim about $24 for the printing of leaflets, which he distributed to letterboxes.
The demand for his mowing services quickly resulted in Jim having to take on subcontractors. Then, in 1989, Jim’s Mowing began franchising, prompted by the Victorian arrival of VIP Home Services. Jim acknowledges the competition was to his advantage, “They did me a good turn.”
Like VIP, Jim was born in Adelaide. He moved to Melbourne as a 14-year-old. Jim’s father was a successful professional engineer who became a university lecturer and consultant. His mother was a school teacher but spent most of her time bringing up four children.
Jim admits he’s the odd one out: “I’m a typical second child – very rebellious and creative. There’s an old saying that the oldest child tends to be the more conventional high achiever; the second child’s the rebel; and the youngest is the gregarious social type. It certainly applies in my family.
“I’m a maverick; I do things differently. My academic thinking was extremely unorthodox – that’s why I couldn’t get a job – and my business thinking is very strange; it’s very unusual.”
Jim gives an example, “We’re the only franchise system in the world that allows franchisees to vote out their franchisor by majority. Like last Tuesday, we had a meeting with some of my franchisees and their franchisor. They’d put up a petition that he should no longer be the franchisor.”
Explaining the next step, Jim says, “He’s got three months to win their confidence back. If he doesn’t, he’s got to sell his business to somebody else who can. Nobody else does that. To me, that’s the essence of what franchising is about – it’s treating franchisees like customers.
“Someone who actually leaves the system is something we try and avoid at all costs. Even when we want them to go, we try and force a sale. You don’t want to have anybody losing out more than you possibly can, which is why the walk-away is the most disastrous thing.
“We’ve got so many unserviced leads, but we’re desperately short of quality franchisees. We’ve grown 100 in the last year but we could’ve grown 1,000 if we could’ve found the people. You’ve got to constantly ask, ‘how can I make my franchisees happier - what can I do for them?’ The whole limit to our growth is not clients – it’s franchisees.”
Studious types are not usually known for their sporting prowess and Jim is no different. “If anybody around the Lilydale area wants a regular squash partner, I’m looking for another one.” Jim is quick to confess his playing standard, “I’m a pretty lousy squash player.
“It doesn’t matter how well you play, that doesn’t matter. As long as the person you play against is about the same level as you and you really work hard. I love it. It’s just so much fun. It’s a really challenging, interesting game, because you can hit the ball in so many different ways.
“The guy I play with is actually 70 believe it or not! The only reason I can get a game off him is because I can run a lot faster - his shots are so much better than mine. I’m competitive; I like to win, but I don’t really care. I just like to have a good game.
“Apart from squash, I’m very much a family man. I love my kids. I spend a lot of time with my children.” The Penman clan are aged 23, 22, 20, 18, 16, 14, 11, 6 and 5 years.
With a home on the outskirts of Mooroolbark, Jim lives with wife Li and his three youngest. Jim declares, “Meeting Li was like going into one of those Las Vegas casinos where you put a dollar in the slot - and if you’re lucky it comes out with $10 million!”
He spruiks that children are one of the greatest joys in life, “I’m always chasing them around the house tickling them and talking about different things – science and stuff. I just love it.”
Jim comments on the unique relationship he shares with his 22-year-old son: “Even at my age, he’s had a significant impact on my way of looking at things. My political and economic views are significantly different to what they were, even a year ago. Just talking to him and reading various things; to be inspired.”
Although Jim admits to being lazy like most people, the only Jim mowing his lawn is the original! “I like being outside. It’s kind of fun”, he admits. “I think there are a lot worse ways to make a living than mowing lawns and gardening. I mowed a week ago but I didn’t finish it because the mower broke down.”
Perhaps the mower was a vintage classic, like Jim’s 1981 Volvo that lives in his backyard, being used for spare parts. “I bought myself a new Volvo”, he announces. “The new one is 1983!”
He actually did try to sell the 1981 Volvo once, just as a joke. “I put it on eBay and asked $10,000 for it!” he laughs. “I said ‘millionaire tycoon’s car - missing several parts like starter mower - this is how the rich live’ – something like that. It didn’t get any bids!”
Jim reveals his spending habits: “I’m notoriously scungy. All my squash shirts had holes in them until it was starting to embarrass my partner. I had to replace them, so I went into Kmart and got some new ones for five dollars each.”
However, Jim is quite prepared to spend money on things he considers important, such as life-changing research. “I’ve got a research project going through Latrobe University”, he explains. “It continues from my PhD work, which is really exciting. That’s my single major interest.
“Just as an example, I’m pretty concerned about the current population – the low birth rate. Well, I’m doing my part, but what about the rest of you?” he laughs.
“I believe there are reasons for that, but this can be changed. Things can be turned around and we can be a dynamic civilization again, instead of stepping backwards, which I believe is what’s happening.
“The moral point of my business has always been to fund the research. I’d like to be a billionaire and I may make it one day, but that’s not really what I’m about. Mainly I want to do my research and make that happen, because I think it’s something that has enormous importance.”
Jim says he also spends money on books, “I like spending money on things that are worthwhile. To me, a new car or nice clothes and expensive holidays - these kinds of things just have no point. But to spend on something like decent books or your children’s education or scientific research, more than anything, is just value.
“It’s not that I’m being some sort of altruist. I wouldn’t like to get a new car; it would give me no pleasure. In fact, it would make me feel very uneasy. But the research project is incredibly exciting. To get the results through and show things happening that I predicted – that to me is just the greatest buzz in the universe. I think there’s a lot more fun in doing things constructively with your life.”
Jim believes he is contributing to the world. He maintains, “The point of life is to make the world a better place than what you started with; that’s fundamentally what it is, whether that’s done through your own children or through larger projects.
“I feel my business does that in its own small way, by providing a good livelihood for franchisees and a good service for clients. I don’t think it’s as significant as things like my research project, but I certainly would have to believe that whatever I was doing in business, that it was positive and constructive, as well as being lucrative.”
So, will Jim Penman ever retire? “Oh yes, one day”, he laughs, “but I’ll be in a box on the floor nailed shut. That’s when I’m going to retire – when I’m dead! I can’t imagine retiring. It’s like a little death. But I’m fortunate to have work that I love so much.
“I’ve been offered money for my business, which means I could live incredibly comfortably – far better than I do now – for the rest of my life. But what’s the point? I wouldn’t enjoy it.”