Jim’s Mowing is a growing concern
Tuesday, 1 April 2008
Last Updated: Monday, 31 March 2008
By Jacqui Walker
Jim’s Group founder Jim Penman says the secret to successful franchising is good recruiting, tough leadership, developing a strong brand and keeping franchisees happy.
In the 25 years since Jim Penman turned his mowing round into Jim’s Mowing, and started expanding, he has created a network of 20 divisions and 2700 franchisees in Australia, New Zealand, Canada and Britain, and now has a turnover of $200 million.
The four tier business model is unique. Franchisees provide the services, master franchisees recruit, support and provide leads to the franchisees, divisional franchisors support them, and Jim Penman’s company sits above them all.
Penman earns a tiny cut of franchisees’ revenue (less than $1 million a year) and extra revenue from running the call centres, the phone system and doing the administration.
But 25 years of franchising has taught him a lot. Penman shares with Jacqui Walker some of his franchising secrets: How to recruit good franchisees, keep them happy, develop a strong brand, and what to focus on to expand the franchise network.
He is happy to answer your questions. Send them to feedback@smartcompany.com.au
Jacqui Walker: Which are the biggest divisions in the Jim’s group?
Jim Penman: Mowing is the biggest. That’s by far the biggest. That’s still more than half, about 1600 franchisees. The next would be cleaning, which has over 200, then fencing at about 150.
Which have been the fastest growing in the past year or so? And why?
Test and tag (electrical compliance service) is probably our fastest growing division. That’s about doubled in the last 18 months. That’s doing very very well.
The main thing that affects it, I mean certainly test and tag’s a good division, you can make very good money, but the main thing affecting it is you’ve just got fantastic leadership. You’ve got great master franchisees.
But that applies within any division. We survey our franchisees every year to find out how satisfied they are with the service they’re getting, how happy they are with their business.
What you find is that when the franchisees are very happy the region tends to be growing. And if they’re unhappy it will be flat or even declining.
And that depends on having a good franchisor who is supportive, that they like, and who can provide some tough leadership.
What do you mean by tough leadership?
Well they’ve got to be a leader in the way that they support people and answer their questions.
But they’ve also got to be the sort of person that says ‘you know, you didn’t bring that customer back. To be successful you need to do this’ or ‘OK, you’re running short of revenue and you’re claiming it’s the drought, so will you accept a challenge that you need to suggest extras to your client?’. Like say rubbish removal or whatever.
They’ve got to be supportive but they’ve got to be also prepared to be a leader. Take a tough line. The best franchisors combine those two.
And do you think that that’s a greater determinant of success than actual demand for the service?
Yes. Because demand for the service is almost a given. We had 67,000 unserviced leads last year. So far this year it’s about 25,000. It’s getting worse.
To give you an idea just how much work that is, when we spoke to service central towards the end of last year (we were doing a deal with them) they spent $4.5 million in advertising to pick up 60,000 leads. Our total advertising budget is about $3 million and we knock back more leads than they got.
And why is that?
Because the demand for services is fantastic. If you offer a half way decent service, then the world just comes rushing to you. The demand for good people in the present day economy is extraordinary. Generally most of our franchisees are completely flat out. Even through the drought most franchisees are completely flat out. They haven’t got time to scratch themselves.
That raises an interesting question. Why aren’t you growing even faster and why aren’t you recruiting more franchisees?
Well, just for that reason – there’s not enough of the right kind of people around. I mean the economy is too good. That’s our biggest problem.
There’s just a real problem. I mean we did far better during the 1990s in the Keating recession. That was our golden time, because if we weren’t as good at what we were doing, our support wasn’t as good, our customer service wasn’t as good.