Jim’s Group founder Jim Penman is searching for a backer to put up $10 million in the company, delaying plans to take the franchise company public in order to bring on an investor with more experience.
While Penman flagged a move earlier this year to float the company, now he says finding a backer to provide several million dollars would be more appropriate and give the company access to someone with more experience.
“It just seems more sensible at this stage, to go with someone who has more experience to get to a point where an IPO is feasible,” Penman told SmartCompany this morning.
Get business news first
Sign up to SmartCompany’s daily newsletter
“I would still like to go that way eventually. I see plenty of methods for expansion with that type of capital.”
In January, Penman said he wanted to float the business – potentially before the end of the year – and said it had the potential to become a $1 billion enterprise. He also detailed plans to grow the company’s franchisee numbers beyond the current 3,200.
But earlier this week he put out calls for a backer to put up $10 million. Part of the plan is to provide vendor finance to franchisees, as the company loses potential sales due to a lack of funding from banks, but it’s also to gain more experience.
“The right person is not just the person with the money. It’s ideally someone who has the right kind of experience,” he says.
“It’d be great if we got someone who has knowledge about overseas expansion, particularly in a market like the United States. That could be very lucrative for us, and someone with the right kind of contact and experience would be hugely beneficial.”
However, Penman says he’s going to be picky, ensuring any backer understands the culture of the business and “the enormous stress of looking after franchisees”.
“We’re not a typical company, and a backer needs to understand that. Public companies focus on the next quarter’s profits, but for a company like ours, we often make decisions that will hurt the next quarter’s profits.”
“For instance, you may have a master franchisor who isn’t suitable anymore, or we might find a buyer for a particular business and do a deal. That’s not typical.”
So far, Penman says he hasn’t found anyone suitable, although some discussions have taken place already.
“That’s one reason for putting a call out – to make sure there’s someone out there.”