35 - Jim Penman - Franchising Jim's Group

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Now, here we go. You know what time it is. Welcome to another episode of the Frankie Lee Podcast. Our mission, to empower others to break patterns, flip perspectives so that together we have clarity, direction and success way beyond what we ever previously thought possible. Here's your host, Frankie Lee.

Welcome back to the Frankie Lee Podcast. Today we have an Australian legend himself. Like he's, if, if you've not seen his face in Australia, I think you'd be lying to yourself. I mean, Jim Penman is, is on, on everything. Jim from Jim's group, welcome to the podcast.

Yeah, welcome. Good to be here.

Thank, thanks for coming on, Jim. I suppose the, the best place for us to start in regards to you is obviously you, you've, you, you've, you've, you've smashed it, you've got gym, you've got franchises and everything now. But obviously I just wanted to understand kind of how you started your entrepreneurial journey in the first place, because I know you, when I did a bit of research on you, you were never really looking to get into the franchise model and the business element. You, you're more so studying and you wanted to, you wanted to use like lawn mowing to fund what you were doing elsewhere.

That's right. Well, actually I never had an idea of going into business for many, many years. My whole purpose of going to university was to understand the reason for the rise and fall of civilizations. One of those big topics which I've been fascinated since I was, you know, like 14 years old. And so I went and studied how to try sociology, didn't like that much, went into history, ended up doing a PhD, come up with this very radical idea, assumed that I'd get some sort of academic post, found that was completely hopeless and out of the question. But fortunately I'd been mowing lawns as a part time student job during my PhD years and that proved to give me an alternative way of making a living.

So you were just literally just mowing, mowing lawns to pay your way through your education at the time and that's how you kind of got started. So, so when you, when you're a.

Student, you see you're working, you're inside, you're sitting at a desk on a computer and reading all the time. So to me, to my mind, I want a bit of a break from that. So to get outside, which I enjoy anyway, push a lawn mower around was, was good, it was a change and also much better money because I could charge like five bucks to mow somebody's lawn in half an hour, which back in the 1970s were pretty good money.

Yeah, I imagine there's still kids mowing lawns for $5 today. So I imagine $5 was a hell of a lot more then. So after once you got started in this, in obviously mowing lawns and doing all this, and you're earning this money and you're obviously supporting your education, when did you think to yourself, okay, look, I can actually really turn into a business and I'm going to focus more on this than actually the educational side of stuff?

Well, it wasn't so much that. It was more the fact that I failed in my academic career. Because what I realized, and that was pretty stupid not to know it, is to be an academic in history, you have to know one area of history really, really well. You have to be the absolute expert in, you know, labor relations in Victoria in the 1930s, something like that. You have to be the world expert. That's how you become a historian. Now. I wasn't just interested in one country, I was interested in the whole world over all of human history. And not only that, but also cross cultural psychology, zoology, biology, a whole lot of things. My city was so vast, I was just far too wide in my interests. So it was just radical. So I really ended up basically flat broke. I'd made a few stupid decisions, deeply in debt with no academic career, and I just started mowing lawns out of desperation. But behind this was this concept that if I ever wanted to pursue my idea, I was going to need a lot, lots of money to do it. Because even though my history, it actually had gone into the area of physiology, biology and you had to do some experiments and use reagents and all kinds of things, none of which I understood. And I had no money. So the idea behind doing this was to go into business so I could fund the research to continue what I did in my PhD.

That's good because I think that when you see a lot of these people that are studying like history and studying all these type of, type of top, I've often wondered myself how they fund themselves to give themselves the time to be able to do that. Because it must take a hell of a lot of money to, to, to be able to sit there and just literally indoctrinate yourself into one niche of, of, of part of history and just go all into that for like 20 years of your life to become that expert in it. And I don't understand how, I didn't understand how they funded it. And now they must Be doing things like, like you were doing, obviously, to be able to do that in the first place.

Yeah. Usually making a bit less money than I did. But because you're working with somebody as a barista or something like that, or waiting tables or delivering pizzas or whatever you're doing, that's how students work. Yeah.

So after you, after you've been doing this lawn round, obviously, when I was reading, doing the research, you obviously built up quite a number of rounds over a short period of time. And then what was it that kind of clicked in your mind to start saying, okay, I'll build these and sell these to other people?

Well, it was more of an accident because what actually happened was that I was mowing lawns and I was keeping abreast. But then what I didn't say is I'd spent 10 years trying to get a PhD and I failed. They knocked me back and my thesis supervisor said to me, look, if you resubmit, if you rewrite and resubmit, you should be able to get this thing to write the methodology. And it was no point to it career wise because there was no job there. But you said you spent all this time, you spent all this time in trouble. You might as well see if I can get myself a doctorate. But I was too busy. So I thought, okay, what I can do is I can collect some of these lawmaker clients that I had and I can sell them as a going concern to somebody else. And I was actually, I didn't know anything about business, but I was very good with clients. I was really, really good at doing a really expert job and turning up on time. So I used to pick up clients very easily and very quickly. So what I did was I put an ad in the paper, the age to sell a lawn mowing ground of my customers that I had. And this is the amount of cut I had, the amount of customers, and this is the income and this kind of stuff too. And so somebody was interested and they started inquiring and we talked about it for a while and all this time I was pulling up more customers. By the time I came to pass over these clients, I had another run. I was flat out. And so I needed the time to do it. So I thought, okay, I'll do it again. So I sold another run. And same thing happened while I was, that was going through. I kept on getting more customers. So I ended up selling three lawn mowing grounds in very quick succession. And, and the thing about that was that it not only gave me the time to finish off my thesis. But it also gave me the money. Yeah. Make more money building up and selling lawn mowing grounds than I was going to be able to do it just, just by mowing lawns for myself. So that's, that's how I progressed on that.

I think, I think what you did there is you became really good at marketing. Like you became really good at obviously pulling in clients and getting clients into your world so that you could then obviously sell them to people that probably weren't good at marketing and weren't good at building.

Yeah, well, the marketing was part of it, but it was also the fact that when you get the lead, you turn into a client. So it's the actual, it's actual control. The marketing isn't that difficult. Lots of people can find work, turn them into ongoing regular clients is the hard part. And I was quite good at that. Mostly I was just very fanatical about service. I just had an emotional reaction. I just couldn't leave a lawn that didn't look perfect. I hated to let a client down ever. I virtually never did. So I just was very good at running that kind of business.

And did you get to, did you get to the point where you thought yourself okay, like that? There's, there's something I'm clearly doing here that's the same thing every time. So I'm going to, at that point, did you say to yourself, okay, I'm going to put this into a system? Or was it when you, when you, when someone suggested the word franchise to you, that's when you put it in the system or did you already systemize it kind of down, down in terms of SOPs and all that kind of stuff beforehand?

Yeah, it's never as dramatic as that. Look, the, the, the way I look at business is this. Every day you try and do it better. You look at what you're doing and say, how can you do it better? Now, whether it starts off from the first time I was pushing a lawn mower around to now, it's exactly the same process. There would be one day of my working life or even my non working life when I'm not asking myself this question, constantly looking to improve. So even when you're mowing a lawn, how do you collect the grass bags with the least time? How do you unload a mower from a trailer most efficiently? How do you look after your equipment? How do you travel between clients to reduce traveling time? How do you market better? How do you make clients more happy? How do you increase your hourly rate on Doing certain jobs. How do you do extra things that can make more money and make clients more happy? You just ask yourself these questions. There's not so much coming up with one system as constantly changing your system.

It's constantly iterating, but it's little things.

It's not so much one or two big ideas. It's a thousands, it's tens of thousands of little, little things that go on all the time. When you're looking at it, that's the difference between somebody who's good at business, not. It's not so much having some great spark of genius, it's just saying, okay, how can I do this better? Can I add 1/10 of a percent to my income by doing this? Not that I think of it in those terms. How can I make my clients happier? I spend a lot of my time thinking about those things every day. I actually go through all of our low surveys, all of our poor surveys. I look at the reasons and respond to them and respond to people looking but having the plates taken off. And I'm always thinking, how can we do better? How can we improve the software, the systems to do this? It's every, every day.

So what you're essentially saying, Jim, is the fact that you're going into, into the, into the part of the business that like the complaints section and you're, and you're finding out what the, what the, where the issues are lying and you're trying to figure out the one percents to put into place to make those better rather than looking at all the five star reviews over here and thinking yeah, that's, that's great. You're trying to find where your low service points are, finding solutions to the problems. So you can obviously increase the, increase the customer satisfaction that way.

Well, for example, one of the main issues we have in gyms is that we offer people a two hour callback but then the franchisee brings back, they don't get through, they leave a message, the client doesn't see the message, but they normally don't listen to phone messages. Then they complain there was no service. So what we're trying to do is to drive into franchisees. You must send a text. Hi, this is Bill from Jim's Cleaning. Tried to call just now. Please call me back on so and so. The client will really miss that. So I try to impress that on people by responding to them and we put it in newsletters and I say it again and again. And then we're developing software which will actually do this automatically. So when you can't get through to a client. You just tap it. Couldn't get through. Automatically sends the text. So it's kind of like looking at. And we lose thousands of jobs a year because the fact that you don't. People don't send a small text.

Yeah. And it's just simple follow up. Simple follow up. And it can all be automated these days?

Yeah, well, it's not yet automated, but by the end of the year, we will have it automated. Anybody using our system of software, which we're calling Bizzer, will actually be able to do this really, really simply. Also, when they email a quote, one of the common problems is they don't. They get the email address wrong, which is commonly the case, or it goes to junk mail. So again, you've got to confirm all email quotes with a text. If you do that, the client will very rarely miss out. Otherwise people miss out. You lose the job. The client thinks Jim's is lousy now. In fact, they've done the quote, they sent it, but it wasn't received.

Yeah.

So this is just. Look, these are just two little examples I could give tens of thousands more of all kinds of things, but they're.

All things that you're, that you're picking up from the, from the complaints and obviously taking out of there and then, and then systemizing around that to obviously solve the issues ongoing with. So your franchisees go and serve people better.

But there's so many other things too. Like, for example, we've got franchisees who stay with us for a long time and then decide to go independent because they don't. They've got enough work. So what do we do about that? What can we offer them? What extra things can we do? You know, what benefits can we provide? Now one of the things we're looking at is a way of getting them to boot up and sell surplus clients, for example, give them a reason to stay in, or ways of reducing their fees and so forth, of giving them a different kind of status within the system. There's just so many different ideas about how you can do things better. And that's what the process is. Right from the beginning, it was never so much some grand master plan, but it was thousands and thousands of little ideas every day. How do you do it better?

Yeah, and, and when I was doing, when I, when I was looking back into, into your journey, I saw that at one particular point. There was another business that you saw that franchise did that you approached, I think, I think was the story that you approached them to try and Work with them, but they didn't want to work with you in some respects. So you. So that.

The story, what happened was this is. Back in the late 1980s, I had a business that was building up and selling lawnmower rounds. Quite small, no uniforms, no nothing. Not franchise, just very. Okay, you know, I managed to buy myself, get out of debt, buy myself a house. I was doing all right. And then this company called VIP came from Adelaide, and they were actually very successful. They had like 250 franchisees, which, you know, these days is not big. We've got well over 4,000. But the fact that in those days, that was giant. They had more money and they had these offices and they had uniforms and signed trailers and a fancy office in South Melbourne, all this. All this stuff. And I just thought these guys would crush me. I thought, I can't compete with somebody who's so good at what they're doing. They're interstate. So I just rang up the state manager. I said, look, I'm Jim from Jim's Mowing, and he knew who I was. And I said, look, I just don't want to compete with you guys. You're too obviously too experienced. I just can. What if I just help to build vip? I'll just provide you with clients and so forth to help you build your business. He said, no, thanks. Don't want to do that. So I decided. I just. I decided I have to try and see if I could compete with them. So I went to the Expo that year in 1998 in Melbourne, and I just raided this store. I went up to the store and said to them, how does this thing work? Not being a very good liar, if asked me why I wanted to know, I would have told him. But he didn't ask, fortunately. And he gave me all this information about how it worked, and he gave me this brochure which had all this stuff in it. I didn't even know what a heat seal binder was. I knew nothing. And I took it away. And then actually the state manager came on, who knew. He said, that's Jim Penman. Don't tell him anything else. So they kicked me off the stand, but I got away. And I took this brochure, I looked at the system and I thought, well, hang on a bit. There is some benefit to this. I can see why a person would join vip.

Yeah.

And I. And in the past, I hadn't seen that. I know I could understand selling around, but what. What could you offer ongoing. But there were benefits to being in.

A system what were the benefits at the time, Jim, that you were seeing that was so, so overwhelming to you?

Well, for example, one benefit is if you're in a lawnmowing business. You might have a business that's worth, you know, a lot of money and then you break your leg, you're off for six weeks, your clients are all gone.

Yeah.

What do you do? But if you're a part of a franchise, the franchise will look after you, which happens all the time. Not all the time, but it does happen. People get sick. So we look after their clients for them. That's just one example. Then you got things like meetings where you can discuss ideas and get extra training and so forth. And you can buy in groups, buy, you can buy discount. There were advantages to the system, but when I looked to it, I thought, okay, there's one thing I reckon I can do. A system that would work better for the franchisees. Yeah, that was my. I thought, okay, your franchisees become your primary clients. When you're franchising, your customers out there are important, but your franchisees have got to be looked after. You can't grow and you can't keep them. So that was my concept. So I actually spent best part of a year working on a contract that would give them many advantages. And I put in all kinds of stuff. I knew that, for example, in vip, when a new person came into an area, they used to go into them and take all the regular clients from existing guys and give them to the new person. And the franchisees super resented that. Even if they were paid for it, they didn't like it.

Yeah.

So I put in my contract a clause that said, we cannot take a job off you without your consent unless the customer complains. I also set up a system where they could choose where they wanted to work and when they were going to work. All done through a blackboard originally, so they could get the work they wanted, when they wanted it, where they want, wanted it. And I put in a whole kinds of territory. Rights, for example. I allowed them to work. They might have first refusal for jobs in their territory, but they could work wherever they wish to.

Yeah.

So that was. They weren't restricted. There was a whole stack of different things that I put in which I thought franchisees would like. I also said too, if you want to put a second trailer on the road, you don't pay any extra. Your fee remains the same, so you can build as many as you like. We've got franchises turning over in the millions. They've paid the same base fee So I put all these benefits in and then I thought, I'm going to give them the best support possible. And I can see if I could compete with this VIP crowd who really scared me. And I thought they asked me at the beginning when I first launched how many franchisees I might have. And I said, look, if it really goes well, one day I could have 100.

And you now sitting at over 4,000.

Well, 4,000 are growing fast. We actually grow by 100 like every three weeks or something. It's just a different world.

And is it Jim's Mowing that grows the most rather than Jim's Cleaning and Jim's Everything else?

No, actually, the fastest growing divisions right now, Mowing has had a very good year, but the fastest growing divisions will be cleaning and dog wash. Both of them are going very good, which has to do not so much with the customers, but they've both got great leaders. And Haydar and Ali run cleaning and Sharon Connor runs dog wash. And they just legends. They're just great people. They've got great systems.

And when, and when, obviously, say you're deciding to go into a new niche gym, do you go and pick up one overriding expert in that niche and then, and then bring them in, systemize that that niche and then launch it as a franchise opportunity or how does that work?

Doesn't work that way. What happens is people come to us, they come to us. I'd like to launch this business most, most divisions virtual and start the same way. And then they're the person that brings the expertise in and they take charge of it. That's how it works.

Right? And then you. And then you brand on top of that and help them systemize and then grow from there. And then once you know how to.

Do things, like they know the technical side, they know a bit about the marketing and so forth and about how you train people, what kind of people can do and how to deal with problems with clients. They know all that kind of stuff. What we understand is contracts, franchisee support, customer service, turning up on time, proper uniforms, having trailer signage done properly, all those kind of things. So you specialize. They look at what's specific to their business. We look at what we understand and we do reasonably well.

No, I like it. I like how the fact that the experts are coming into your business and you're just wrapping the business element around it, the marketing, the structure, and then you're taking them and then obviously that proves itself and works out accordingly according to that.

Let's just go, sorry, talk about One of the secrets too is that I make myself very available, very contactable. Somebody in my position. I actually just, I just have an open email. Jimmits.net People contact me. So almost always what happens if somebody comes to emails me and has this idea? Most of the time it doesn't go anywhere for various reasons because it's, you know, they're not actually running the business successfully or whatever. But how I pick up new business, somebody just writes to me and said I've got, I've been doing this, could this be franchiseable? I talk about, I say what sort of hourly rates can you get if they can't make at least 60 bucks an hour, not worth doing and what sort of expertise have you got and how successful are you and stuff? If it looks good, we talk further, we put them through a training course and then obviously uncle helping to start.

How did you get to that 60 an hour cut off point for you knowing whether it's going to work or not? Why is that 60 not 50 or why is that 60 not 70? You know, why is it 60?

Well, I don't know. I mean don't forget this is raised over the years. Back when we started 30 years ago the price wasn't that high. But it's just, look, it's just a good guideline is to say if you're making 60 bucks an hour, that means in a 40 hour week you can make about two and a half thousand dollars. I mean that's kind of like roughly where it is, which to me is a decent living. If you're going to run a business, you're not working for 20 bucks an hour, are you?

Yeah, yeah, yeah, for sure, for sure.

60 in there. I think most franchisees would make that. Some don't. I think some of the cleaning people don't. I had a 10 year call to one of my cleaning franchisees and he was a great guy. He was making like every time he had, he had a. And you can see from his rating too, he's a fantastic customer service. Every time he had a vacancy of 6, people would dive in and say, please can you look after me? But the problem with this guy is he wasn't charging enough. He's only making about 50 bucks an hour. And I said to him, you've really got to put your prices up. You could be charging an extra 20%. You still have plenty of work. Yeah, it was just very reluctant to do it for some reason.

People, people tend to undervalue themselves and what they do every time, every time you're over subscribed in your business, especially in like a cleaning business or a mowing business, you should be upping your rates by a percentage because obviously that's the reason why you're oversubscribing. If you get people fall off, you fill them with new ones and when you hit the limit again, you, you raise your prices again, don't you? It's just a classic business.

I was, look, just this morning I was, I was talking to a, emailing back and forth with a cleaning franchisee who's finding himself overloaded and he wants to put his prices up, but he wants to make sure he doesn't get a complaint out of it. So I just told him how to do it. I said, be very apologetic. Actually what he wants to do was to, was to get rid of his surplus clients. He can't cope with so many, demand is too much. And I said, don't do that. Put your prices up, raise them 10, 20%. If the customer complains, then I'll wipe any complaint because to us, charging high is not a complaint ever. Yeah, turning up late is a complaint. Doing a poor work is a complaint. Overcharging is never a complaint. So I said, put your prices up. He's obviously, he's like a 4.9 star rating out of five. He's a fantastic operator. Obviously customers love him. I said, you're going to be charging more, so go right through your whole business and put up all your prices until you're making so much more money. And then if you lose that, if you, doesn't matter because there's plenty of work.

Yeah, I love, I love it and I just want to, I just want to go back, Jim, to. You've obviously you, when you picked up that glossy brochure from VIP and, and you go, you go, you took it home and you've dissected that and you've now seen the positives and the negatives to how Jim's group could be as a franchise model. What, what was, what was your, what was your next step? Then obviously you thought to yourself, I'm not selling any more rounds, I'm just gonna.

Because I kept on selling all my rounds because I didn't have a contract. It took me nine months to get a contract together because, because lawyers couldn't understand what I was trying to do. They kept on telling me, you're being too nice. The way they put it, they couldn't understand how I was giving all this power to franchisees. I said, a franchisor should write the contract to suit them. So you can do whatever you like.

Right.

I said, no, I wanted something that I want to join. If I was on the other side of the table, I want a fair system. And they actually told me, you're an idiot, you are doing this. You will definitely want to tighten this up with time and give yourself more power. I actually did the opposite with time. We put in extra powers for franchisees. For example, we made it possible for franchisees to change to a different franchisor. If they weren't happy, their own franchise has no say. We made it possible to vote out their franchisor. We actually allow them to veto changes to their own manuals. These are all things that come in over the years. In fact, the manual things only happened a couple of years back.

And so just your. It's just in your mind, if you give them that empowerment to be able to make change, then they'll be happier within themselves, they'll serve the customers better. And that's. That's where you're going with it.

It. Yes. Yeah, that's right. I'm not saying everybody loves gyms. One of the things people get very upset about is there will be a push on customer service, particularly me people. I had a franchisee just this week who got so upset about some of the complaints that came through. He's quite a good franchisee, actually, but he just didn't like the fact that I wouldn't take off a complaint unless there was some evidence for it. I will, if there's a reason, if he can show. I called the client, I texted them, they didn't. They said, I didn't call, but I did, you know, sure, I'll take it off or if you go back and fix the job, then we'll take it off. But he wanted me to take off customers complaints that I didn't think were there was clear evidence for. And he got so angry, he said, I'm leaving the system and going into these things happen. So not everybody loves gyms, but the benefit of the system that we have is that we have an enormous amount of work. About one in three jobs are now unserviced and our franchisees tend to be completely flat out year round, which was definitely not so in the past. So pushing customer service can upset franchisees from some points of view, but at the same time, it makes them. It keeps them very busy and they can charge really good prices because their reputation is so strong.

No, I like the way that you've. You've got to. You've got to be able to say no when it needs to be said. Because you can't just have people remove, removing bad reviews and stuff like that just because it doesn't suit them at that particular time. They have to, they have to show the willingness to own the fact that they own a business within a business. And they have to service the clients right to get these better reviews.

They don't actually argue with that. What they tend to say is that I did give good service, but the client was unreasonable or whatever. That's kind of like what comes out of it. I mean, this guy, I shouldn't give his name. This guy's actually a very good operator. He just objected to the poor surveys because people are very sensitive about surveys. They matter a great deal. Yeah, like if you've got a, like a 4.8 or 4.9 or 5.0, you're a star. You know, somebody who's, somebody who's like a 4.2 is really not good at all. And we can send warning letters and all kinds of things and in breach notices if they do badly enough. And there's a lot of pressure and people do feel the pressure. They even say I'm causing to have mental illness because there's so much pressure from these things. But I said, yeah, maybe, but at the same time, not being able to feed your family is also going to cause you mental pressure as well. And our system does give you lots and lots and lots of work, but.

The support's there to help them be a 4 1/2, 5 star business within your business. Anyway, 4.5 wouldn't be good.

The average star rating in gyms is 4.65. But what's interesting, you know, is people who leave within the first year, we lose about 12% in the first year. Their average star rating is 4.2. So those who give great service actually tend to, tend to stay a lot longer because they make better money. There's a very strong correlation. You find a franchisee on a poor rating, they're often struggling to pay their fees.

Yeah, yeah. And that's, and, and that is all predicated down to the fact that they're not servicing the clients right in the first place. Because they're servicing the clients right. They'd, they'd be happier, they'd earn more money, they'd be able to pay the fees. There's not, there's not an issue to you, you're not getting on their back as a business about their poor star rating. So all, it all flows in a circle of do so if you know. And ultimately at the end of the day for you as the main man in the business, don't want 4.2 franchisees because that brings the whole group down as a whole, doesn't it?

Yes. Actually they put me on the phones yesterday just as a sort of thing to do a video of me answering a few phone calls. And then one of them actually spoke to this lady who was booking a job and I managed to put forward properly. But then I said, look, I'm Jim, I'm the founder of the company. I just wanted to, you know what you think about gyms. She said, oh, it's fantastic and I use you guys for everything, you know. And she mentioned real love, a whole lot of services she offered us for, because she gets such great service. So this customers using us for lots of things and recommending to their friends and stuff is what drives it.

I was telling a few of my real estate friends that work for different, different organizations. Some of them are high up in Ray White, some of them are high up in Harcourt and others are high up in other top, top end brands on the Gold coast. And they were that. They all said that they used your services for cleaning, for mowing, for this, for that. I didn't realize how many businesses use your services to service their clients as well. I thought it was just like, just like myself, I might get my garden done or something like that. That's, that's what I thought it was. But it's more. Loads of businesses use gyms to service their clients as well.

Yeah, because, because on the whole, and it's not always, I mean it upsets me because I read three days. On the whole, we do give good service and we do give a good job. One thing we're not is cheap. And I tell my franchisees, never compete on price. Never ever compete on price. We are the elite. We are not interested in competing with the likes of high pages. If they want three quotes, for heaven's sake, leave them alone, go somewhere else or put your price on, but never compromise. No pension discounts, no nothing. My primary loyalty actually is to my franchisees. I want them to be successful. That's the core of what we do. Yeah, I actually always say this. My first priority is the welfare of my franchisees. We're also passionate about customers. But you look after customers because they help your franchisees to succeed.

Yeah, no, no, I, I totally agree. At the end of the day, anyone that wants three quotes for anything probably isn't doing business with any one of the Three quotes they get anyway. Like, they're just.

I like that people complain about high pages because of that they do it. And it's very common to get a bad survey back because a lousy job done. And the franchisees. But they didn't take my quote, it wasn't me. That's very common. They get somebody else to do it. Get a lousy job. Yes, they were cheaper, but the job wasn't good.

How are gyms like getting most of their leads in for that, for their franchisees and for getting customers? What's your main way of doing that.

By the Internet these days? It's all changed completely.

Like Facebook, Instagram or Are we talking Google or.

Most of us look up Google. Sometimes they look up other things too, but mainly they just look us up because their name is so powerful, because of reputation and because you see thousands of trailers driving around and vans driving around. People just know the brand and they use this. They've had experience, you know, in general, we look after people. Well, not always. I get frequent messages which they're so disgusting they'll never use us again, which really upsets me. But generally speaking, we do give good service. It's mostly reputation. One interesting thing lately is that not only is our unserviced list being rising dramatically, the demand for our services is rising far more than it ever has in the past. We can't even spend the advertising quite often. We've actually had to give back the best part of a million dollars to our franchisees in unusable advertising because they're so busy year round. Not in every division, but in certain divisions, particularly ones like fencing and mowing, where there's a huge demand and we just can't cope with it.

Does that mean then you have to bring in more franchisees to facilitate all this extra work that you could be getting?

And that's what we're trying to do, obviously. But that's the point and that's the hardest part. Getting more clients is easy. Getting more franchisees is more of a challenge.

Well, getting more of the right types of franchisees is more. So the question, isn't it? I just want to pivot back because I really want to. Going through this. One thing we'll touch upon is the importance of customer service and the importance of customer satisfaction, like you have taught, like you have touched upon now. I will. I think we should touch upon that again really in depth and get your tips on that later on. But going back to that first year, you've got this contract, you've got this golden contract written that you've reiterated, reiterated, reiterated, got it exactly how you wanted it to. What was your next step from there? That was. Was it. Was it like one, two, three franchises, or did you go from one to 100 really quick?

Okay, now, what happened was I've been selling lawnmowers for a while, and I had some subcontractors. Most of the subbies weren't very good, but some of them were. So what I did is I went back to the good people, the best people who bought lawnmowers for me and said, I will swap your round for a franchise, rebrand it. I'll show you all the advantages. If you're not like me, you can just walk out again and go independent, which none of them ever did, but you could. And I went to my best subbies, and they knew that was finishing, and they just said, okay, we'll switch. Someone said, we'll take a franchise. So I already had. You know, there was probably about a dozen people to start with. And then also I was. People were interested in lawnmowers. They were coming through all the time. So I was. I just said, look, I've got this new franchise concept. Would you like to change to that? Because we're changing directions. By the way, the way I used to sell more mine grounds was I used to put a little. Every time my person. I dealt with somebody who wanted to buy a round from me, I put their name and their phone number in black text on a white card, and I stuck it behind me on a board, right? If anybody's interested in buying a lawnmower from me, I would say, look at the board, ring some people there and ask them what to do with. So they'd ring them up and they said, what's Jim like? And they say, yeah, he was fantastic. He gave us everything. He said he would. If customers dropped out, he always replaced them without any hassles at all. He was happy to offer advice. I even used to run free lunches and stuff for them. So that's why I used to sell lawn mowing rounds. And when I started franchising, I actually did the same thing. This was decades before the code of conduct. I had a list of my current franchisees with their phone numbers, and people would come to me and say, why should I buy business from you when you're just starting up and, you know, VIPs all interstate and they call these franchisees? And I said, well, look, some differences, but here's a list of my franchisees. I want you to Go away. And I want you to ring as many of them as you can and I want you to go to VIP and get their list. But that was being a little bit precious because I knew they wouldn't provide a list. They couldn't provide a list.

Right.

And do a comparison. And anybody who did that research would go with us because. Because my people were a lot happier than theirs were.

And what kind of numbers did you get up to by doing that, by running that process?

Well, at the end of the first year, I think we had about 60, so it was a decent start.

That's, that's, that's quite high growth for franchise though, isn't it?

Well, for starting from nothing, yeah. But don't forget it's a lawnmower business. Not last night having 60 McDonald's.

Yeah, yeah, yeah, yeah.

60 McDonald's. I'll be a lot richer than I am now. So. Yeah, yeah, that was, that was, it was good. It was surprising, actually. It really was surprising. People started coming from Interstate. You know, when I first did this, I actually had a. Something in the contract about Interstate. And I said, don't be stupid. This is a lawmaker who's going to go Interstate. That's what I said. But people kept, they just kept on coming to me and saying, we're interested. I've heard what you're doing in Melbourne. We'd like to start the same thing in Brisbane or whatever. And a couple of my franchisees actually went Interstate. One of my guys from Melbourne went into State, moved to Adelaide to take a franchise. And when I realized that we needed better support, I just rang him up one day and said, phil, how would you like to, to run it here? And he said, how much? I said, oh, ten grand and pay me off and stuff. So he took it on and then he was very successful. And then one of the people who used to be our recommended suppliers for Mowers, Q Mowers, one of the partners there, basically went to Brisbane, to Queensland to start that. So that's how it kind of happened.

And it just seeded off across and you just growing at one state at a time. And then obviously those people were being seen and you're growing mole franchise. What did it kind of look like in year two in terms of numbers for you?

Oh, I don't really remember. It just grew. It grew quite fast. It was, it was very radical. I mean there's, there wasn't that many service franchises around in those days. This was a very different world. Like you go to the Franchise Expo now and there's 20 thousands of franchises.

Thousands of them, yeah.

There's so many and most don't even go to those expos, so you wouldn't even know. But it's a very common thing. We've got all kinds of. Of competitors, people who've tried it over the years, like James's and Fox, and all kinds of people, most of whom haven't, none of whom have done particularly well by comparison anyway. So it's difficult. But you see, if I was back in those days, starting against someone like myself, it would have been hopeless because the people around, they just weren't that. They weren't so good. I mean, just to give you an example of what happened, we were over in Perth, just starting up the original franchise over there. And while we were running this expo this night to explain to prospects, and then there's this report came through about how this lawn mowing contract company had been actually trashed. They had this terrible story, so we all really worried about it. What's going on here? So he went home to watch the TV and it was actually investigators and it was vip. And what happened is six of their franchisees from Western Australia who wanted to go independent. VIP said no, they wouldn't. You can't go independent. They took them to court, they lost. They hired a QC to stop them going independent. And so they went on the investigators and they never recovered from it.

So we have a policy.

Yeah, VIP killed themselves by actually trying to hold people in the system who didn't want to be there.

And they just killed themselves for legal fees.

No reputation. I don't know what it cost them. I imagine they thought it was worthwhile. The reputation was killed. It was a terrible story. Even splashback on us. People say, I've heard bad things about lawnmower franchises. Hey, it wasn't us. We have a clause in the contract that actually says you can go independent anytime you wish to. Just pay four grand, which is say.

I've got a Jim's Mowing business and I'm out mowing lawns. If I pay you four grand grand, do you take my trailer back off me and my mower and all that stuff?

You keep your customers, you keep your uniform, you've got to get rid of uniform, you've got to rebrand. Yes. Yeah.

But you keep the trailer and keep everything. So it literally is that easy to get out. If you want to do it, just pay the four grand and that and that's it.

Yeah, the great majority never do, actually. We've got people who've been with us for years and never taken a lead for years and years, literally, and still want to stay with us. And it's. We just put a little bit of a roadblock just charging the four grand. In the beginning we didn't even have charged that, but we just put that four, usually four, sometimes five grand, sometimes three, but a very small amount of money. It's never worth anybody's worthwhile to challenge it. Just to make it a little bit of a.

Just to give them a time to think about what they're actually doing and what they're actually giving up and everything like that. And all the infrastructure, too easy, but.

Never enough to be worth fighting a on it. Nobody's ever gone to court with these things because it's just too little. It take you. You're going to fight it in court. It cost you a lot more than four grand to do that.

Yeah, yeah, for sure, for sure. Jim, one, one question I have to ask you. The. When I first came to Australia seven years ago, I was, I was, I was staying at this golf course for a little bit because I had booked a room there because it was cheap on, on booking.com or whatever at the time, you know, where I was just, just booking wherever I could stay cheap, you know, I had no money. And I remember for the first time I saw your green trailer with your face on it. And then, and then I saw it once and then obviously you see it over and over and over again. And I thought to myself at the time, I thought to myself, this is a massive business, but I wouldn't, you never would have thought that that would. Your face would be the logo of the brand. So, like, can you give me a bit of an insight into how you came about being on the side of every trailer across Australia? Because like, you're everywhere. You're on dog washes, you're on clean it, you're on car stuff, everything. I see your face everywhere.

Okay. Now the way it started was this. When I was mowing lawns myself and had subcontractors, I used to do all leaflet dropping and I found if I put my photo on the leaflet, we actually got a better response. And that was basically me with a beard, which I had in those days, and one of those bucket hats, which is good for my lords because it doesn't get knocked off when you go under brushes and things. So that was my picture that was on the. When we decided to franchise, I thought, well, you can't put a picture on a, on a, on a shirt or a trailer because it doesn't look strange. So I had a graphical form done of it. It probably cost me a few hundred bucks. And then we had a look at the wording and actually the font we use. I actually had a few different kinds of fonts, and I put them around the office where the girls were answering the phone to look at them, which is the easiest one to understand. So that's how we did it. So it was kind of like, yeah, it would have cost less than a thousand bucks to do our first logo. And down the track a bit, we actually changed it. Some of my managers came to me and said, hey, this is a bit. You look a bit grumpy in the logo. Let's do a better version. That's what we use now. But how it came about. Look, it's a mowing. Don't forget, when I started, I had no thoughts of doing anything besides mowing. It was just a mowing business. And I looked like a mowing guy. If you think about it, a guy with a beard and a hat. He looked like that.

That.

So that was pretty obvious. Now. Then we thought, this is working quite well. So let's actually start doing it for cleaning, using our contracts and our answering service and everything else. But, you know, nobody's going to want to buy a cleaning business with that mowing logo on it. So we'll do something called Sunlight S U N L I T. We do sprays. I did this other logo, sold a couple of franchises. We had it found it very difficult to find words, so I went to people, I said, sorry, here's your money back. We can't make it work for you. We can't find you enough work.

Yeah.

And then somebody came to me and said, I want to do Jim's cleaning under your brand. And I said, no, you don't, because that won't work. Because it's. This is a mowing image, isn't it? It's a beard and a hat.

Yeah, yeah, yeah.

I mean, it could be a woman. Why would. Why would you want a woman with a beard and a hat to clean your house? And I said, well, we think it'll work. We want to use your logo. I said, no, it works. And I said, look, we'll give it a try ourselves. We'll do it as a kind of a contract basis, like a master franchisee. So I said, all right, give it a go if you think it's going to work. I don't mind having. Having a go. And they did it, and it worked. Because they go into a real estate office and they hand over there and they sell from Jim's Cleaning. Oh yeah, who's that? Oh, Jim. Oh yeah, like the mowing guy. Yeah. Okay, well, I'll give you a go. So it actually did appear with.

So your face was actually open indoors because of the reputation you previously had from your previous business.

That's right.

So is, is your, is your advice then in general to, to anyone in any business is always put your face on the brand or what, what, what advice would you give around doing that?

Well, I don't really know, but, but I mean it, it doesn't hurt. It depends who you are, I suppose. But the thing about it is it personalizes the brand. And a lot of great brands, especially in Australia, are done that well. Like Dick Smith, for example. Everybody knows Dick Smith. It kind of. And when you're the person that owns the business, it's also very helpful because you know, you're talking to Jim, the guy who started it, which is a lot faithless. Whereas VIP is actually. Vip is a guy called Bill. This who I actually have a lot of respect for. We get on quite well. He's a good guy and I appreciate what he, what he did as a pioneer, but he didn't put his name on it. I guess one of the reasons he did that because he wanted to be able to do different services and obviously he didn't want to mowing oriented.

But it seems to have really worked for you though, like all the thought process behind that. And VIP's thought process in being a faceless brand seems to have worked exactly against them. How they thought they'd be able to go into more stuff, but you've actually turned out and got into more stuff than probably they have.

Well, I don't think it's the brand. I think it's the systems operation like Vip as an example, don't have any selection system, which would be anathema. You know, I had a franchisor who. I'll just give you an example of how strongly we do this. We had a case of a woman who rang me up because there was problems with getting a franchise contract done. And I talked to her and I realized after, and I asked her some questions about it, she was buying a franchise for her son who was in his early 20s. And the reason she was doing this is because he couldn't land a job.

Yeah.

And I said to her, your son cannot have a franchise. He cannot, because that is a recipe for failure. And she was very upset. She got really really? So I wish I hadn't called you. And I said, you did the right thing. And she said, but he needs work. And I said, okay, well, tell me what I'll do. I'll contact the local franchisor and I'll get to. I'll get him to get some work with a couple of local franchisees because I know they've got plenty of work.

To see if he wants to do it.

And he was hopeless, absolutely hopeless. He would have failed. He would have lost his money because the mother was buying their business and the son had trouble holding a job. This is two things alone, either of which would actually tell you this person was not suitable. Now, the point of it is that particular franchisor came up for renewal these 10 years and I said to him, you cannot continue. That's outrageous. This was the last to even think about selling a franchise to someone like that. It's absolutely outrageous. Now, he sold his business. He sold it for a very good profit. He got full, full price paid up for it. No question of all. But that was. To me, it's a cardinal sin to put somebody on who you don't really think when you must have reason for thinking it's not going to be successful. Yeah. So that attitude that says you've got to look after your people first, that's the thing. And the systems operation and giving the people what they want and the right kind of training system and the right kind of support and ringing people regularly and running meetings at least every six weeks, all those things that we do to make them happy, that's what does it. Not the logo. Logo could be anything.

Yeah, no, no, I fully agree. I fully agree with you and I think it's you. Should I do this with clients of my business as well? I'm like, look, you are not a good fit for us, us. So I don't think that we should serve you. And I'll happily give them a competitor's number if I. Because I. You can just tell when you speak to clients on the phone if they're going to be a problem to you after you've been doing it a little while. You can tell when you speak to new franchisees that you can tell that they're not going to hit the levels that they're going to want to require, which means you've now got an unhappy load of unhappy customers and you've got a load of unhappy. An unhappy franchisee as well. So there's no point setting people up to fail. So if you don't feel that they could, they could serve you and this, that and the other. Then, then don't serve them at all. Like send them on their way. And there's nothing wrong with doing that. And more business owners need to empower themselves to be able to make that decision and do it. Which, which, which I find is like people always trying to grab money from every different direction they can. Is that something you've seen?

Yeah. Well, look, my. Most customers are actually quite reasonable, but at a different level. But most are very nice, actually. But you get some, few that are just terrible. We have a system called a red list. If we have trouble enough with somebody, we put a red list and say we'll not provide service to them in future, more than they're worth. We had one particular person just last week who had three or four different franchisees dealing with them. And you put in complaints, but it's the same thing and these are good guys. And so eventually I wiped the complaints and we red listed the client because it was just different. Difficult.

Yeah. The classic example, you know, if one person's complained about five people, then it's probably more likely the one person's problem is the five. So.

Especially when they've got a good track record, if they complain about somebody with a 4.2. But then I might say something, but you know, you're talking about people with a 4.9s and so forth and saying things about them which nobody else says. It doesn't, it doesn't, doesn't ring true.

Jim, one, one thing I wanted to, one thing I want to ask you as well is what, like, you are still as. Pat, I can clearly see you're still as passionate about this as probably you were when you started it. The first thing is like, how do you stay so passionate? And why have you stayed so involved within the business yourself? Like, because, because with the amount, with how fast this has grown and you could have, you could have exited years ago and, and, and, and sat on the beach right now.

Comfortable, luxurious lifestyle for the rest of my life. I could live on a mansion and take overseas cruises and all kinds of things. No question. I'm probably not as rich as you think I am because we've got so many trailers and only a small amount comes through. But look, there's two things. First of all, I love what I do. It's fun in a way that nothing else could possibly be as rewarding. It's just really, really engaging, entertaining. I'm notorious, but I don't like holidays. I struggle not to work every day. Of the week, but I just love it. I enjoy it so much. It's so interesting, so challenging. And the other thing, too, is I have a very strong sense of mission. My franchisees are like my kids in a way. I feel responsible for them. I hurt when something goes wrong. It's quite painful. It really is, because you feel like it's an extended family. And I know that what I do makes a difference to them, and if I can help them. I just had a great. Every single one of my franchisees has my direct phone number and email address, and they can ring me anytime, day, evenings, weekends, anytime at all. And they contact me. I just had somebody contacted me earlier in the month because his work was slowing down. He was getting less and less leads, and I had to look at the system, and I thought the way he was set up, there was a problem with it. And I fixed it. Just fixed it. I actually deleted one particular survey, which was unfair, which was. Which was giving him a bad rating. I did a couple of things with the way he was put down for work. He just emailed me back this morning and said, thank you. Things are going so well. I looked, and there's a whole stack more leads coming through now. That's. That's rewarding in a sense. It's like the high point of my day.

Yeah.

To be honest, more than. More than talking to you because of the fact that I was. Not that I mind talking to you, Jim.

Cheers, mate.

The sense that I was actually able to help somebody and made a big difference to his life, and it took me so little time. It took me, like, 10 minutes to figure that out. And I do that kind of thing a lot. And that sense that because I'm personally involved, nobody else. Well, I'd love to think that eventually I have a successor who has the same passion, but you have to have a purpose for living. I'm a great believer in the science of happiness. And happiness is not just an accident. Happiness is good relationships, good personal relationships. Happiness is having a sense of mission, a reason for living. Happiness is also things like health, like I get regular exercise and watch my diet and so forth, and involvement in community, like in my church and so forth. There's a whole lot of things. So in a sense, I'm living. I'm living a dream. I'm living in paradise. I'm living. I'm very happily married, Got some wonderful kids. I've got 10 kids, actually.

So you've got 10 kids?

10 kids.

When you're working seven days a week, How'd you get. How'd you get time to create seven, ten kids?

Actually, I don't work ridiculous hours. I'm just available. Like, for example, things. In fact, in fact, in a, in a. In another couple of hours, I'm off to my farm for. To spend the day there, just digging potatoes and things, which is from part of my recreation.

You'll have to set up Jim's creche for all these, for all these kids and grandkids and everything else you're going to have.

No, I wouldn't look after them myself because I work from home to, like, if they get dropped off. My youngest boys, my youngest, youngest kids just turning 12. So there's not. They're not mostly at home, but I have contact with him, which is good.

Jim, give me, give me an insight then, because obviously I can see how clearly passionate you are. I'm passionate about this podcast. People can clearly see that you're passionate about this business, gyms and, and franchisees and serving people and, and you, you talk about being on mission. You talk about being on purpose. You talk about the importance of happiness and how you're living the dream because you found those things. Give me a bit of a roadmap and a bit of an insight into how people can go and find that for themselves and, and kind of how you came to that conclusion.

Look, it's, it's. It's important to do something that you can put your heart and soul into. It's. People often ask me, which. Which division should I go into? Which is making the best money? I said, it's the wrong question. What do you want to do? Do you like working outside? I love being outside. I love, I love trees and gardens and fresh air. I just enjoy that Other people don't like it. They want to work inside. Some people like to do work like bookkeeping and so forth. Or it. I mean, what do you want to do? Find something that you love and just. Yeah, you got to have something that means something in your life. You've got to work towards something helping other people in some way. See, my great mission, too, is my research project. I was just on the phone before I talked to you. We had an hour talk with my research team, talking about all these different experiments we're running. And this can change the world in dramatic ways. You've got. There's something that you care about. You know, there's a lot of. There's a lot of research about how you spend money, too, and wealth isn't as much of a positive asset as people Think they've actually found that there's different ways to spend money that have a different impact. So for example, the worst way to spend money in terms of success is in terms of status goods like having a better car and stuff. It's very competitive, it's very win lose type of thing, doesn't produce a lot of satisfaction. Buying goods in general comes next to that. Just like things that you enjoy experiences are much better still, like going out to dinner or going on a holidays kind of thing. But you know, the absolute best thing that you can do with money that's going to bring happiness, give it away and give it away to a project in which you are personally involved. This is not, this is not my, this is scientific finding. This is what makes people happy. And people like Bill Gates and Warren Buffett, who I enormously admire, are people who've actually made tremendous money but now devoting so much of their resources. Bill Gates is now working full time in his, in his. He's my number one world hero, Bill Gates. I think what he's done is fantastic and you've read about him.

He gets a lot, he gets a lot of bad press, a lot of bad press in regards to what he does.

He's a truly great man and his example has inspired others like Warren Buffett and many others. And I think that kind of thing. And I would say that my guess is he's a pretty happy man. He's got a good family life, you know. You know, he would actually drive his kids to school, he works with, he does the washing up with him, this kind of stuff or I think something like that. I think he washes up dishes with them. Leads a very ordinary life in a lot of ways people would find extraordinary for a multi, multi billionaire. He's a very clever man in every sense.

I don't know from what I know about Bill Gates, I don't think his is key driver was the money. I think the key driver was the mission that he wanted to create a software platform and put a computer into everyone's hands and all that kind of stuff. I think that was his main driver initially.

Money is a very bad driver. You want to do something the people who do best. And don't forget I have experience with thousands of franchisees and franchisors, people who do better, those who care about what they do. The franchisors who do the best are the ones that want to give great service to franchisees who want to really get satisfaction out of looking after people well. And the franchisees who do best have a passion for service, not just for the money. If you go for the money first, you make shortcuts. You'll do things like put a franchisee on who's the wrong person and they'll fail. It doesn't make you happy. You've got to care about what you do. And one of the things I'm most proud about and people often ask me, are you proud of having 4,000 plus franchisees? And I said, there's one thing more than anything else that I feel proud of is that my franchisors by and large have the same attitude towards franchisees as I do, which is very unusual. And it's always franchisees first. We had a guy called Brian Duckett come out from the UK to one of our national conferences and he'd been involved in franchising for decades and he had volunteered hundreds, literally hundreds of better systems. And he said, I've never seen anything like Jim's. Because of this attitude, franchisees matter, franchisees first. And that made me so proud.

And, and the reason, the reason, the reason why that is such a powerful thing that now I've understood, understood your point from what you've been talking about is the fact that by putting the, putting them first and by, by filling their cup and obviously and understanding that this business that they've bought is to provide a lifestyle for them and their family and empowering them to do that, they go and treat the customers better as a byproduct of the fact that they feel like they belong and they feel like they're on purpose and everything like that as well. And then they serve people better.

They also do it because if they don't do it they're going to get into trouble with bad complaints and surveys and so forth.

Yeah, they get, they get gym ringing.

It tends to be. There's a very strong culture at gyms in various ways. Customer service is part of it franchise or is its franchisee service. But also things like there's a very strong sense of family. You often hear franchisees talk in those terms about being part of an extended family or a tribe. Look, just to give you an example, a couple of years back we had this dreadful thing happen where one of their franchisees in Western Australia killed his three little girls and his wife and then his mother in law, he killed them. Now it wasn't his business, it was demons. He actually said his business was a source of joy to him. But everybody was so shaken up and upset by. I went over to Perth to fly and I met the franchisees at a meeting in the. In the golf course there, and most of the franchisees in the whole state were there. Everybody was so shaken. Most of them didn't even know this guy. But just the fact he was one of us that this terrible thing happened to. And I just said, what can we do, people, to stop it happening again? And they came up with all sorts of ideas. Like, for example, as a result of that, we actually give every franchisee, we send them a preach magnet with all the emergency numbers, the health numbers and stuff. We provide all franchises, including myself, I might say, with mental health training. One of the things I suggested at the time, they said, what about if some of us were to act as mentors, unpaid mentors, just to be there as a voice to speak to. And I said, well, that sounds good, but who would be prepared to spend their time? You know, most people in the room put up their hand, most of them, because they were decent human beings who were concerned about the terrible tragedy that happened. So you often hear stories about people who, you know, a new guy will have troubles and he will talk to an experienced guy and he'll spend two hours on the phone just helping him out, doing things for them. During the lockdown in Victoria, it was wonderful. I had one particular franchisee who was in Test and tag, whose business had been shut down. He had no income, but he rang me up and said, jim, look, I know business is not working, but I'm actually pretty well off financially. I know there's some people around here who've been really badly hurt. Can I help? He was offering, with no income to give money to help people less fortunate than him. And I thought that was just wonderful. We had one girl who was threatened by eviction from her home because she couldn't pay because she wasn't a student, didn't have Australian residency, and she wasn't allowed to work. Dogwash girl. We'd lent her some money. Not very much, but we'd lent her some. But other franchises were giving her meal vouchers and stuff and they were helping her out. We said also, too, if you get, come and stay at our conference center. But the way that other franchisees just got around to help people in need, that was wonderful. There was no money in it for them. They just did it because this sense of family, that's something I really, really feel proud of and that's part of our culture.

I love the way that you've instilled that because obviously you've fundamentally built that from the ground up, up like it's, it's you saying yes and no to certain people within your business and who comes in and who and who and who leaves is what's created that. That culture within your, within your business, within your brand, the loyalty within your customers. Everything comes from the top down and then, and then, and then feeds back. So that. That's a testimony to yourself. Now Jim, one thing I have noticed is you've got a phenomenal library behind you and I, I love reading, reading books and I've give us, you know for, for the people out there in business that are trying to. Trying to get on and trying to push forward even life business, the, the. Their mindset. What books would you suggest are your like four or five key staples that they go and read that have to be read? You know.

I don't, I don't disappoint you. I probably read or listen to at least, at least a book or two a week. So there'd be. That's a tiny fraction of my overall library. Most of it's in other rooms or on the Internet and stuff. But most of what I listen to is not actually to do with business. I've just finished reading a book called the Code Breaker about Jennifer Doudna who's part of the. Who got the Nobel Prize for her role in developing crispr. Another one called the CRISPR Generation about what happened in China with this guy who genetics two babies which was horrifying what they did. Reading a book about the royal family in England. I have a vast variety. I'm listening to another talking book about post disaster a wonderful story called Earth Abides about when most population of the world is wiped out by disease. Is to actually business books. What could I recommend? One book I read very early on was behind the Arches which is about McDonald's.

McDonald's is actually phenomenal business.

I do not will not let my kids eat there. It's horrible, it's fatty and everything else. But as a franchise McDonald's is fantastic. What they do. The way they train people, the way they look after them, they're genuine concern. The way they consult them. You know this McAfee thing they do in Australia, that was all decided by franchisees. So they're great franchisors, brilliant franchisors and they deserve every success. I take my hat up to them. So anything about. There's a film called the Founder which is about Ray Kroc.

Brilliant film that. Brilliant film. Unbelievable.

I would Recommend, I think 7 habits of highly Effective People by Stephen Covey.

Yeah. Absolutely.

That's more about ethics and stuff, and it replies to family life as well. But it also talks about business principles. And I actually hadn't read it. I heard about it. My daughter Sarah, who's just trained to be a doctor, actually said, dad, this is the kind of stuff you talk about. So I actually picked it up and read it. And it's a great book because it talks about putting character first, character before everything before, and how you can win win relationships and so forth. You know, one of the things I'm most proud of is the fact that we virtually never go to court with anybody. In the whole history of Jim's Group, with over 4,000 franchisees and jobs, businesses worth millions of, we've been to court exactly three times ever. Yeah. In more than 30 years. And that's because you really work with people and try and solve their problems and negotiate with them and try and be fair.

One thing you mentioned there that's really important and I want to drill down into. Is because I've read, I've read the books that you mentioned the win win situation. And people need to understand that your, your sole responsibility in life is, is, is to leave it feeling like a win win every time you meet someone other. You don't want to, you don't want to ever feel like the other. You don't want the person that you're interacting with to ever feel like they're, they're at a loss because now you've just damaged that relationship with that person for, for no reason. And it's a, it's a great staple to remember when you're conducting business with anybody is to always make sure that they win and you win. Not, not. It's not not. You win at this at the sake of them losing.

Yeah, that's right. Look, look, I always believe even with your competitors, you play fair. I do not denigrate my competitors. I just don't do it. We actually have a system because we've got so much unservice leads. We have a system where we actually sell surplus clients to our competitors in a way that beats the crap out of, out of high pages because we just charge them a single lead for a lead. And they're good quality leads because their gyms, these, because they mostly convert to jobs now they're under the same rigorous systems as our franchisees. In other words, if they don't give good service, we cut them off. But we do that kind of stuff. And during the lockdown, you might have heard I got very vocal about the Premier, I thought that was grossly unfair what he did, and needless. But I actually spoke not just for my people, but for all contractors throughout the state, anybody who's needlessly lost their job. That was. This spoke.

How were your. I mean, I presume your most affected franchisees were in Victoria? I mean, how did, how did, how did they survive and get over all this? All this massive lockdown for like what seemed like a year?

Well, it was actually eight weeks, but it was, it was awful. It really was. It was very, very distressing. Personally speaking, we weren't much affected financially. I mean, it cost us maybe a million dollars or so, but comparatively speaking, that's small being we've actually had a record year overall. But the hurt, not just the financial hurt, but also the psychological support. People who couldn't look after their clients, couldn't do their jobs. One of the most wonderful things about that, we of course suspended all their fees. But we said, if you can go out and do anything at all, like emergency, you're welcome to do so. We won't charge you anything for it. But not only that, but the franchisors in gyms, what people call master franchise, we call them franchisors, they were actually still ringing their franchisees even though they weren't paying many fees. They were technically all suspended, but they still ring up. Say, how you going, mate? How's things going? Bear up, it'll be over soon. And I was speaking to them a lot too. So it was, it was very hard psychologically because I could feel the pain. I had two franchisees with suicide attempts within their own family that I spoke to directly. It was a really terrible time.

Yeah.

But again, what was good about it was this sense of family, the sense we were all here hanging together and these sense of relationships that matter so much.

And sometimes you go. A lot of the times you go better as a group than you do individually anyway. So if you.

I think psychologically it's very important. One of the things we offer, and this is a strange thing I didn't realize when we started out. I always thought of a franchise as a way to get work, but natural fact, long term, the sense of community actually seems to matter at least as much. We found, for example, that if you don't have regular meetings, franchisees don't tend to do nearly as well. They fail more often, they're less happy. The actual meeting together we've worked out about every six weeks is the right amount. Not more often, not more or less. Meet together, get to know Each other, discuss their issues, build relationships, get together for meals with families and stuff. That sense of community is very far more important than I ever thought at the beginning.

Yeah. And is there an ideal person that you believe, ideal qualities in a person that you believe is really suitable for the franchise model? Is there, like, you know, must have this, this, this and this and this to be suitable?

Look, the thing of it is this. We probably tend to recruit more from the middle to the upper level of the employment market and also a lot of New McGregor because they're often very enterprising people because they come from another country. So generally speaking, our recruits are more above average. But the reality is this. If you look at figures on business failures, now look at businesses like cleaning and gardening and so forth, which are not like retail businesses, their actual failure rate in the first year, the best figures you can get is between 90 and 95%. 95%. And this is if you can look it up on the Internet. If you look at the American, there's the Cleaning Janitorial Service association of America or something like that, you can look at their Internet, they get their 95% failure figure. Our average failure figure in the first year is 12%. And when I say failure, that includes people who've gone independent or been offered a fantastic job offer. So it's a fraction. The way I look at it is this. There are certain people, we call them gold and silver, who probably succeed regardless. They're just really, really good. Now, we can help them a lot to build their business, fast putting workers on, but they probably succeed. Most of our franchisees are what I would call bronze, and they're people who probably wouldn't succeed without support. And we're very good at helping those people to succeed because we provide them with training, with work, with ongoing support, with encouragement, with meetings, with a whole raft of structures in place to help them when they're making a mistake. Regular phone calls, weekly in the beginning ideally, and then least monthly thereafter. Just network system, mentors, this kind of thing. That, that's the. We can help most people to be successful. The ones we can't help are usually what we call leads, the ones who just won't listen to you. This is a person who's failing. And the franchise always say, you're doing the wrong thing, you should do this. And they say, no, no, you're wrong. And then I ring them and I say, you should be doing, no, no, you're wrong. This person who's failing and he talks to people who are experts that I'M not going to listen to you because I know I'm right. And then they fail. So there are people who cannot be helped. But they're not mostly stupid, they're mostly just stubborn. They just want to be right rather than they want to succeed and be.

And be and being right isn't a metric that puts food on the table, is it? Do you know what I mean? Like, it's always.

They have constant complaints and bad surveys and they say, Jim, there's a solution to this. Your surveys are all garbage. It's all unfair, it's all wrong. If you stop doing surveys and things, then I'll be fine. But they're struggling and they're making a living and they're giving bad service and they're not turning up and they're doing all these types of things wrong. But to them, the problem is the survey system, the gym system, me personally, anything, anything. But look internally and say, what could I do better? Because that's the biggest thing. People have got to be prepared to look at themselves and their business, say what can I do better?

It, yeah, it, it, it, it's all, it's every. The way I see it, Jim, is everything that happens to you, positive or negative, regardless of a few certain types of things, is, is, is your fault. And if you accept it as your fault, like this, this good thing happened to me, that's my fault, this bad thing happened, that's my fault. If you accept it, it frees you. And once you're free, then you can learn, you cannot learn while you, whilst you're blaming other people for anything or blaming other situations for your lack of anything, like there's no growth there. You. The first, the first rule of growth is to accept responsibility for everything that happens to you. And then that allows you to be free enough to, to grow in the ways that you're saying in order to.

Find that and you take the action you need to. Now in this particular case I was mentioning before, one of the actions this guy took was to contact me, which takes a bit of guts because I am sort of this quasi legendary figure. I actually try and talk to every franchise training. So they have some and I write to them an email after one month to see how they're going and ask about paperwork, guarantee and stuff. But he had the guts to actually contact me and say I've got a problem. And he discussed it and I was able to fix it for him. So that was an action that he took. But all the same, he was somebody who's a good Operator. He was looking at what he could do and how you could improve. And he was doing marketing and stuff and he was doing all kinds of, kinds of things. So he was, he's a good guy.

Yeah. And ultimately willing, willing to learn.

Jim, most people can be successful in business with the right support in my experience. I think it's one of the things that distresses me that people are so hooked on this idea to be successful you've got to go to university and have a degree and do this kind of stuff. The reality of it is character counts more than anything. Most people can be successful and they can do very well in life, life. They just need the right kind of environment and support.

So Jim, in that case, then the, the, the. I have to ask you this then. So if there was, if there, if, if you, if you're leaving God's green earth today and, and, and you can't leave gyms, you can't leave anything else, but you can just leave a few pearls of wisdom that, that go through the ages of time, so to speak. What would, what would those pearls be for you? From your experience of all this that you've gone through in business.

Is always look to improve what you do, look at everything that you do and try and improve it. Never be satisfied, never think it's good enough. Never think you've learned everything. Never be too proud to listen to everybody. I've learned so much from people with far less experience than me. I've learned so much from franchisees. One of the reasons I love my franchisees to ring me is because they often come up with ideas. They say what about this? And I say, oh yeah, why does that happen? Why do we do it that way? Why is this message not phrased that way? And they tell me, and we change it. You can't be. I reckon one of the great virtues of the gospel actually, as I'm a practicing Christian, as you may know, is the attitude of humility. And that's very underrated in this modern world. The idea of Jesus washing his disciples feet, being able to accept wisdom from everybody and learn from everybody and never be too proud, never think you know it. Yeah, that's probably my number one lesson I give to anybody. And if you're talking about service in general, business in general, just look after your customers or for a franchise or your franchisee, be fanatically devoted to them more than anything else. Don't worry about the money first, worry about your customers first, your franchisees first. And if you do that, the money will come.

Yeah. I agree. And one of the most impactful things, things from, from talking to you today for me was, was how you, how you talked about happiness and how you talked about the importance of it and, and how it was structured within your life and how you found purpose. That really, that really hit me and resonated because I, I, that is something tangible that I can see would impact anyone's life, you know what I mean? Regardless whether they want to do a franchise business or any business or anything in life. It's like find, find that purpose, find that why, find that risk, reason to get up and then fight and, and then, and then put the happy, build the happiness first and then you can obviously go and achieve anything you want to. So fantastic. Jim, I, I just want to say again, like, I really appreciate your time coming on the podcast today. I appreciate doing that. I'm, I'm going to put the links in the show notes to your Instagram, social medias, website and all that stuff. Is any like any, any law. Any last words?

I think I probably said enough. I just think, you know, you're talking to me and people like to talk to me because I'm successful. I just think people have, they put too much store by money, by monetary success. You know, one of the most successful people I ever knew was somebody who's, whose best job was a tram conductor. This was way back, but he had six great kids and he was a great father and a great husband and he had great, a great force in his local church. I just think, and there's a saying that one thing I really love is there's no other success can compensate for failure in the home. And I think people focus too much on money. Money is a great product if you've got a purpose for it. But to accumulate money for the sake of it and for the sake of the status and for the sake of the baubles that you can buy with it. And obviously I live in a pretty simple life myself. I drive a 12 year old car, for example. Example. I love that, I love that people should have their priorities straight and you don't, you don't cheap happiness just by piling up money and possessions.

And I gotta ask you this one more question then before we go just on that because it's just come to me but when you started your, your journey in going towards this franchise model, there must have been like a dollar figure in your head that you're probably trying to hit. And when you hit that, was that the point you realized there was more to life than Just money. Because when you got there, you realized that looking back, like, was that really the goal?

No, no, Because I've never had a financial goal as such. I never had a goal of seeing how many franchisees I could have. I never had a goal of making a certain amount of money or a certain amount of income. I've never had that. My goals were always to do with my research project. I needed enough to fund the research project and I wanted my franchisees to be successful. I mean, I just don't think in money terms and I really don't care. I mean, if I had a billion dollars tomorrow and some of the things we're doing could make me that could make us that kind of money, I wouldn't live much different, I can tell you. I'd just be able to do more of the things that matter to me, like the research that we're doing, which could potentially, I believe, have a big, big impact on mental, which is a terrible curse and seems to be getting worse. I think money has never been my goal.

I love it. I love it, Jim. I love everything you're doing. I'll put links, links to the research so people can read more about that. I'll get your. Get your team to send those through as well. Fantastic. Thank you so much again for your time today, guys. If you, if you've listened to this podcast and you've got some value from myself and Jim on this podcast, asked if you just. Message, message Jim, what's the best platform? Email Jim give email jim jims.net I'm.

Remarkably easy to reach jims.net reply but.

Let him know that you like the podcast. We'd appreciate it if you can leave us a review on all the platforms. That's Jim Penman. Thank you very much and tune in next week.

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