#70 Over 5000 Franchises and 1 Billion in Sales & he Doesn’t Care about Money. Story of Jim Penman

Hello, everybody, and welcome to another edition of the JT Fox Podcast Network. We interview some of the biggest names of the world on this podcast. People from Pacino, Stallone, Schwarzenegger, Calvin Klein, Mark Wahlberg, just to name a few. Literally some of the most successful entrepreneurs in the world. And sometimes we debate the news and. But today we have a very special interview because there are certain times I've always been a big fan of what's called conceptual implementation. Something that is common as dirt in one industry can have the effect of an atom bomb in another. Now, we have a lot of Australians that listen to the show, but people all around the world, you're about to really learn from when. When you say you put your customers first, when you talk about putting the people that work for you first, when you talk about putting your franchisees first. Everyone in this, in Australia knows who this man is, and it turns out they know who he is in Australia, because I talked to a couple of New Zealanders today who actually knew who he was as well. He's got one of the most successful franchises per se, per size in Australia, and he has done it with 100 pure authenticity. His story will absolutely shock you. I spoke to him last week and I said I need to interview as well. Please welcome to the show Jim Penman. How are you doing, Jim? Yeah, good.

Great to be here.

So, you know, at first when we talked about this podcast, you're like, you know, you know, in Australia, this is good. Outside the world, I don't know. And after listening to you, I said your message of. Of your company, Jim's Group, and what you have done and all the franchises that you have. And so just for people, in case they don't know who you are outside of the world, when someone says, what do you do? How would you describe yourself?

Well, basically, Jim's Group is a service franchise company started with mowing back in 1989, and we've now got just under 5,000 franchisees. Mowing, cleaning, test and tag, pest control, handyman, fencing. We do a lot of different stuff. We've got nearly 50 different divisions.

So did it did. It's like each franchisees offer different services or the franchisee can offer all those services.

They're specialized. So you have somebody who's a mowing franchisee. There are situations where they haven't got enough work in one division.

They.

They can actually take work in another division as long as they're properly insured and so forth. That's not very common, though, because mostly they're very busy Doing their own work.

So for example, I come to you, I'm interested into a franchise and obviously I do lawn care, but what if I want to do cleaning? Is that like because I come to someone's house and they're like, oh, you mow lawns, we also need cleaning. Am I able or the person who gets their franchise, are they able to take that job at that particular moment?

Yes, absolutely you can. And you're encouraged to do anything, anything that you want to do when you get there. They're normally pretty specialized, but there's no, there's no restriction.

But is the gym. So is it the, your brand on the side of the, of the trucks and the trailers with the specialty underneath it or assume. But because your brand is known to do everything right. So people may be specialized. But how often would I call, you know, I call someone to say, well we only do lawn, we don't do pest stuff, so we'll recommend you to another gym service or how would that work?

Usually that's what they do. Because a person who does lawn mowing wouldn't normally know how to do pest control. They might clean some windows, for example. But it's sort of a 98% would be you doing your own work of your own division because you know, specialized and pest control is a very specialized occupation. You don't want somebody who doesn't know what they're doing doing something else. And let's face it, people like mowing lawns, they like cleaning, they don't usually want to do the other job. A mowing guy does not want to go into a house and start cleaning. They don't usually enjoy it. They're a mine contractor because they like, they like gardening. If you like cars, when you want to be car washed, if you love dogs, when you've got a specially fit out van to wash dogs, you don't want to be doing other kinds of jobs.

So I'm just going to take it back. Your model is almost like Uber the way I think about it. Right. And not franchises about. They start off with cars and they really dominated, got well known and now they were able to add Uber Eats and you know, delivery services and you know, bicycle rentals as well. And they built the core and obviously you came way before the Uber and the likes of the ecosystem. How did the initial idea to start the concept of doing lawns and maybe take us through the progression of all of a sudden now you're offering every service?

Well, I was a student in the 70s mowing lawns as a Part time student job and I intended to be an academic. I had theories of society and history which were quite radical and different. And then I found myself at the end of my PhD with no prospect of a, of a any kind of academic career. So I just basically turned my part time mowing business into a full time business. And then a few years later I was faced with competition with another company that was franchised there and I was just had a small business with subcontractors building up and selling lawn mowing rounds. So I just franchised in self defense you might say and turned out to be surprisingly successful. When somebody asked me at the beginning how it might do and I said well look, if it really goes well one day I might have 100 franchisees. So we're closing on 5,000 so it's got a bit better than I thought it might.

So in America there isn't really. And in Canada where I'm originally born, I can't think of one lawn mowing services that's franchise right. It's kind of this guy with a truck and a trailer and. And you have your newer ones that have a couple lawnmowers and then you have one that's more commercial, bigger tractors and things like that that's more experience and seasoning that also offer high end landscaping services to it as well. How was it is a disabled to work in Australia as opposed to just you know, hey, googling like the franchise model that have going to franchisee. So why is it working there but hasn't really caught on in North America?

We actually did try it in Texas many years ago. One of the issues is that in Australia and New Zealand the cost of labor feels to be high. We don't get a lot of Mexicans for example streaming across the border. Yeah, there's a Pacific Ocean in between us. So because of that in what we found in Texas was that people didn't tend to people with business acumen didn't tend to want to be doing manual work. So it's based on team sort of systems there. In Australia we're very sort of egalitarian. So a person who's been a business executive or a lawyer or even a doctor can go out and mow lawns for a living. And people sort of say well that sounds really good. You're in your own business. It's a very different attitude. We're very egalitarian type of people. We don't tend to look down on manual labor in the way I think a lot of North Americans do.

Well you're right. And especially Texas where you get cheap labor. Obviously as it goes up north it gets colder. So yeah, that liability or people hire people and lower prices because they're obviously hiring people at a much lower rate illegally under the table. Many of them as well. You know, they pick them at the Home Depot in America. And so basically if you now had to go and then how did they expand? So you're, you're dominating the lawn. So is the idea is the people, if I buy a franchise from you, am I really doing all the work myself or am I building a business or am I building my own job yourself and, and does gym services. Are you guys providing the leads? Kind of like a call center. How does the model work of franchises?

Well, we overwhelmingly provide leads. We're very good at it. We've got hundreds of thousands of unserviced leads a year. Most franchises are completely flat out. We also have a system called pay for work guarantee which means in the beginning if you're not making enough money, which is typically anything between a thousand and two thousand dollars a week depending on what's in the contract, then we say you can go and do free services, including for franchisees from other divisions, family, friends, anybody, just go out and do it free. Give us name, address and phone number and then we'll pay you the money. And that actually tends to put a floor under their income, but also is a very effective way of building the business.

Right. So you kind of give them a head start almost. You're kind of almost giving them a grant in a way to get started. And how did you do the cost benefit analysis of this? Was there a mathematical formula? Because obviously now we're. How much people are paying you for a franchise?

First of all, it could be anything from 10,000 to 20,000 plus equipment of course, and whatever that is.

Right. So that, so are you providing the equipment for them or they, they sort of go directly? They're just.

We'll arrange it. Yeah. We don't tend to sell things directly ourselves. Sometimes we do. Sometimes like in Dog Wash, we actually provide the whole trailers as part of it, the package. But because they're 25 grand bits of equipment.

Yes.

So we provide everything. We get them in going in business. Look, the biggest thing we provide is, you know, if you look at statistics, the people who go into things like gardening and cleaning businesses, their failure rate is quite high in the first year. This is based on stuff that you can find online, between about 90 and 95%. Now our first geo attrition rate Averages these days around 12%. That's the big difference. And it's a matter of we train people, we have a very, very focused training course which is quite effective, which I speak at. We provide all the equipment, we actually provide them with leads, we give them paperwork, guarantee if they need it. Most of them don't need it because there's so much work here. And we also provide ongoing support, like we ring them regularly, we run meetings and so forth. So it's a whole raft of support to make sure people are successful.

So it's almost fair to say that the 10 to 20, they pay, really, you're reinvesting it back in them to get started, Correct? Almost, in a way, in some cases, if they're having a slow start by giving them the money, so it's almost taking that money. But really you're reinvesting into the people themselves.

Yeah, pay for work, guarantee. Most of them, Most people never claim it. Most people are very busy. The demand is huge. We've got hundreds of thousands of unserviced leads. We have amount in the contract that's paying for advertising. We have to give it back. All of our fencing franchisees just got a free conference on the Gold coast, all expenses paid in Queensland, all paid for by the advertising budget because we can't spend it because there's just so much work. I don't know any equivalent, any other industry, but particularly because I think because our quality systems have become so good in recent years, our reputation with the public is extreme and most people who call us actually just want us, they just want gyms. So we actually convert, we think, about three quarters of all leads into jobs. It's not a competitive thing and we charge well too. We tell our friends, you charge good price, do never compete on price, charge well, but do a fantastic job. And if anything goes wrong, you're going to go and fix it, you're going to refund, you're going to do whatever you need to make that client happy. So it's a very tough, rigorous system which really presses hard on franchisees and sometimes they get quite upset at me because how, how strong it is. But at the same time it just gets this enormous flood of work coming in.

So, Jim, how much of this? When people call and pick up the phone, the mental image is, I'm calling Jim, right? Jim, you're the face. Would that be a accurate portrait? So, and then they're trusting you that you pick someone that you've trained and validated first and foremost. Correct.

And then if something goes Wrong, then we're behind them. You know, we had a guy recently who went feral. He actually took a whole lot of money from people for doing fencing jobs that he never did. You know, we're talking about tens of thousand dollars. We paid it all back. Every single client got completely paid back. It's a problem if there's a warranty issue. If something was put in like a solar panels eight years ago, if it's under warranty, we'll fix it. Doesn't matter what the manufacturer is, we'll fix it. So we're very well known for that in Australia and New Zealand.

So the, the, the concept of you, though, like a lot of times they say it's hard to scale a business on you. Right? Because I want Jim, right. I want Jim to, to cut my lawn. I want Jim to clean. Right. Especially at first when it was there. How have you been able to sort of detach the gym part with an organization? Because I don't think other than Wendy's, but I think it was the guy's daughter for hamburgers. So I think in a way. But you've really, probably very few in. They've really stamped their names and it's just them. It's not really you doing any of the work. You're sort of like a trusted referral services in a way.

Well, I mean, when you buy, when you buy Coke, you don't expect Mr. Coca Cola to actually deliver it to your door, do you?

I mean, no, but, but, but, but they don't have the name of the, the founder of Coca Cola. And so that's why they were able to sell it or grow it there. This is your name. This is literally your name on there. So kind of like almost. We tell people, don't put your own name on your own company because it makes your company unsellable. But you clearly prove that theory. So how did you detach them from saying, I'm Jim, but I'm not doing all the work, I've got my people. What was the messaging and turnaround for you to build that brand?

It never really been an issue because we're so well known in so many, in so many different ways. People just trust the brand. And I look, I put my brand on it. Originally when I started gardening full time, I was in a suburb called Baldwin, so I called it Baldwin Gardening. And then after I got beyond that, I thought I needed more generic names. So I call it Jim's after myself. So it was kind of like almost accidental. We never put much thought into it. The Logo's incredibly well known, but it's never, never had much money or effort or anything put into designing it. It just works. Jim's is very, it's very Australian. It's a guy with a beard and a hat. It's very personal. And look at the whole thing is very personal. Like every single one of my franchisees has my direct phone number and email address. Every single one. And they ring me evenings, weekends, anytime. And I'll answer the phone, I'll respond to them very quickly. Clients. If a client calls the office with a problem and it's not fixed the first time, the franchisor supposed to look at it. If it's not fixed the first time, they send it to me and I personally email them and sit on it until it's fixed. So it's a very, even though it's not me actually doing the work, it's a very personal business.

So let's go take a step back about your philosophies, right? Because obviously Jim's is not just a startup as a lawn service. And now Jim does everything. What is your value system which you wanted to incorporate into the company, which is the cornerstone? And does every single person buy into that? And I'm going to give you an example before your answer of Chick Fil A and I was recently studying their business model and what they do is they'll have franchisees, but they're not really franchisees. They, people work there two to three years, they pay 10 to $20,000 and you know, they, they have to have a two year apprenticeship to learn everything they learn. And then they put them in a situation and they split 50, 50, but they take the real estate fees on top of, because they own the real estate, they take 15% franchise fee and then they spend 50, 50. So a franchise will make 250, 200 to 300 depending on the franchisees. And, but they have people so dedicated into the brand where, you know, because they're closed on Sunday. Working, working, working. And obviously Chick Fil A is a massive brand in North America now, specifically more the United States. What's your model that really kind of works?

Well, ours is relatively low fee. Our average turnover, average fee paid by a franchise is around 6% of turnover, which is quite low. And when you, when you bear in mind that people tend to typically charge at least 10% more than the opposition, it's not hard to justify. So it's very generous. Look, the core idea behind gyms and the thing that I think makes successful is one simple idea. And it's in the bottom of every email, including the one I would have sent you. Our first priority is the welfare of our franchisees. That is number one. And then under that we're also passionate about customers. But franchisees come first. This is my tribe, this is my people, this is my extended family. And I take it very, very personally. The worst thing that I ever see is somebody that I'm in contact with who's failing and I would do anything to try and help them to succeed. So it's a very, it's a mission oriented thing. And you talk about and where does that come from? Because you don't want to, you want to sell the business. I would never sell gyms. I would never trust. There are these people come in and they, and they take over franchise brands and they rip people off and I would, I would never trust that.

Have you been offered, have you been offered selling franchises?

I try and make offers from time to time, but it's not of interest. I mean I'm 70, I'm still good for another 20, 25 years. My health is good and after that I got great kids and potentially in laws will take over and I want that to be carried on. And that is very characteristic of Jim's. We had a guy come up to a conference in the Gold coast years ago who'd been involved in franchising for decades. And he was talking to my franchisors, that's my, the leading people look after the franchisees. And he said in all his, he'd never seen a spirit like ours. And that's that spirit that we serve our franchisees. You know, our franchisees can actually veto changes to their own manual. They can vote out their own franchisor and get somebody else. It's extraordinarily franchisee focused. They can build their business to whatever they like. And their fees, which are basically fixed fees but a small lead fee, they're basically the same. So a person can be turning over $2 million a year and their fees might be $1,000 a month. So it's a very franchisee oriented business. That's the, that's the major focus. And we look after customers. They're important, but the main reason they're important is because we get lots of good paying work and our franchises make good money.

Jim, obviously your franchise model is very different. Most people, I'd say everyone doesn't really think like you. And a lot of times people think I'm going to get a franchise because there's a system in the box. But they can't do anything, they can't change. It's very corporate. There's a lot of red tape. Assume that it's not a Jim's franchise. And people all over the world. Do you think that people buying a franchise is better than actually or starting their own business? Because obviously you're very different. So there's no model like yours in the world.

So the figures I gave you before speak for themselves and you can look it up. Look at the Cleaning Janitorial Service association of America. Look at their website. Cleaning businesses have a 95% failure rate in the first year. Ours it's around 12%. And that's not all failure by the way. That's people who can decide to do something different. We are very good at getting people into business successfully. What they sometimes do after they've been in for a while is they just pay us a small amount of money and they go out and be independent. There are thousands of ex gyms franchisees and we don't make it difficult for them.

Have you ever thought about going public? Did that ever occur?

I have, it has occurred to me. But the same problem is if you go public then you've got shareholders, one of the next quarter's earnings. And we always think really long term in gyms. We never think about money in the short term.

Can you talk, can you expand about that? Because we've become a very in business. Right. So obviously if you take care of your clients, in your case the franchisee, they'll take care of your profits in your bank account. But in business often, especially when we start off, money's a measuring stick of how well we're doing where you are. Right. So the better we are what we do, we should make more money. You are now taking a very long term approach which by the way the same story as Chick Fil A really, they just, they have a 30 year plan and most people came and think 30 minutes ahead. So how did you, did you ever always have this long term mentality or at first was short term and then you turned or you were long term? From day one I was always long term.

Wow. My emotional driver is always success of my people. I never ever think money first. I never hesitate in any way. Look, it started before I was mowing lawns, before I was franchising. I used to sell lawn mowing rounds. And one of the things I realized is that the way to do it properly is to look to the interests of the person you're dealing with much more than yourself. So if people would come to me, they'd ask my advice on whether to buy a law mowing ground from me or from somebody else. I would ask them questions and then if it was the right answer, I would tell them to go to the other person because it's in their interest. So you always think the other person's interest. And when we're talking about a potential franchisee, it's a really fundamental part. You don't take anybody on unless you're convinced they're going to be successful. So we had one young man who was going to buy a franchise through his mother and I discovered, because she rang me for help, that he was completely inappropriate, he was likely to fail. So I actually, I nixed the sale. I said, you can't buy a franchise. And she was upset and I said, look, I'll get your son some work. You can work with some of our franchisees locally because I know they need workers. And he tried and he was hopeless. He would have failed in no time, in no time flat. And the point about that was it's not just bad for the brand, it would be terrible for that guy, that young bloke, and his mother too, that she would have wasted the money. And what happened is when that franchisor came up for renewal in the next year, we did not renew. We said, you can sell your business, but what you did was so unconscionable. To sell to somebody you should know could never succeed. And that's the attitude you can, look, you've got to think of that person first. That's a deep moral conviction and very widely shared. If people ask me, what I'm proud of is are you proud of having nearly 5,000 franchisees? I say no. What I'm most proud of is the fact that that attitude, that value system is really widespread throughout Jim's growth.

So the 5,000, how many, how much sales a year does it generate? Would you.

Oh, in terms of turnover, best part of the billion, I suppose.

So a billion out of so a billion. So 6% is about 60 million a year. And you know, I talked very brief last year. You're very modest, you, you're non flashy. We live in a world where, I don't know if you have social media, but that everyone's showing off cars and Lambos and watches and we've become a, you know, fake it till you make it society. Fake is the new real. Here's someone like yourself, who's 70 years old, who makes, I mean your company does a billion dollars in sales. So if you just kind of do the math. I'm sure your overheads is very small considering the way you are. What do you attribute that way of thinking of? Is it frugality? Like, would you consider yourself like. Because I'm frugal too. But I don't know, some stories you told me last time, I was like, well, I'm not like that. You really don't care about money. So what is your relationship with money? Like, the money did you make? What do you do with it?

Look, can I first say that $60 million, that may be the gross income of all of our franchisors. We've got a system of franchisors and divisional franchisors. Then you've got some very heavy costs like call center advertising, everything else. My actual personal income is pretty good, but it's a fraction of that. But look, in terms of lifestyle. Yeah, I told you, I drive a $10,000 car. I'm trying to buy an electric one because I think it's safer. But I buy my clothes from Kmart, which is equivalent to Walmart. I don't have any need for money. I don't like travel. I never find business.

United States one time, right? And we talk about. So you think you're missing out by not seeing the world or different things or just.

I don't enjoy it. I don't enjoy it. I like so much.

If I, if I gave you a million dollars now, like I said, do whatever you want with it, what would you do with it?

Invested in my research project.

So. So is that a hobby? Like, where does that energy go when you're not business? Gym?

Well, I actually like working on my farm. I've got a small farm and I go out there and I dig in that, plant nuts in the forests and so forth. I'm turning into an eco food forest. So it's, that's, that's my hobby. I enjoy it. And I like folks in my church pretty heavily and so forth. And my scientific research project, which is looking at ways of curing people from things like drug addiction, alcoholism and so forth. So they're my main interests. I don't have flashy. I don't enjoy expensive stuff. I really don't.

Do your kids share the same philosophy as you or you just.

Well, yeah, they know they're never going to get rich because the money, the money will go. They just get a bit of help with housing, but the money basically goes into, into the research project. They know that's what it's all about, but they've never got used to it. You know, they, they kind of have a sense, you know, some theoretical sense that we're rich. But, you know, where's the, where's the mansions and the luxury cars and the resorts and stuff? It's just.

But you can afford it. That you could. You could if you wanted to. You just choose to now, right? I mean, you could get anything you want. You just chose to. Because that doesn't make you happy. What makes.

I have two major extravagances. One of them is books and the other is fruit. Okay. Unlimited spending on those two areas. In other areas, I don't really have expensive taste.

So you talked about the research. What, what research are we talking about? Where you're investing a lot of time and money outside. It's like a pet project or it's.

It'S a direct continuation of the, the PhD work I did in the 70s. And I was trying to understand the way the societies work, what makes civilizations rise and fall. If you want to look it up, it's www.Biohistory.org. it's got some videos and books and stuff in there. But basically the implications when studying history is that is that societies are decided by the character of individuals. And what I've decided, determined is it's got to do with the way that animals react to food restriction and so forth. So actually what we're doing is reverse engineering food restriction to try and work out the epigenetics and the hormones and the pheromones and everything and trying to just help people live a better life. That's my, that's my biggest passion.

Are you putting the same type of passion in the, in the business then now into this project? And essentially Elon Musk would argue his obsession about rockets and none do with money to find a better way and, and you know, whatever. Very successful people, sometimes they have a, you know, they just don't do it for the money. And then it's just like this need to solve a problem. So what's the biggest problem? I think you solved the problem. Would you say, what's the biggest problem you solved in business in general, and you've done very well doing.

So what's my biggest problem?

What's the biggest problem that you solved that your company has created that you say, hey, Jim solved this problem out into the business world?

I haven't solved anything. We just get better at it. My biggest problem is always how can I make my franchisees more successful?

Would argue that you provided people an opportunity and a system where they're able to earn a very good living because you gave them the structure, the plan, the training, the vision, the value system. And In a way, 5,000 people out there, you know, that maybe wouldn't have had a business or maybe they'd be working for somebody else in a business. So maybe you created the dream of the ultimate small business. Perhaps.

Yeah. I'd always see it as a work in progress, though, because, look, in our last franchisee survey, we survey our franchisees honestly every year. One of the questions we ask, we ask about support in particular, but we also ask, how do you rate your income? Now, we don't know what they're making, but this last year, this 52% said they're making good income and the 8% poor and the rest is satisfactory or okay. Now the problem is 8% poor is 8% too many. As long as one franchisee is not making a good income, I'm not satisfied. As long as one client is not getting the best sales, I'm not satisfied. So it's not that we, It's a work in progress. Every day of my life and I talk about Christmas Day, Easter Day, every day, weekends, every day I'm looking at myself. The question, how can I do this better? And I can never be satisfied when one of my franchisees, it's not a financial goal. It's not like becoming a billionaire or something like that. It's. I want every single one of my franchisees to be successful. And it's an impossible goal. We'll never reach it. But you'll never.

Is that a sort of obsession that a lot of successful people have and that maybe people have? We should obsess more on whether it's the consumer experience or something, maybe because there's lack of. I think we live in a society where instant gratification that, that, that really doesn't happen anymore. And so people don't obsess on getting better and improving because they just think it's going to be handed to them.

Yeah, and people are too money minded. I think focusing first on money is a terrible idea. I was just finishing a book called A Man who Broke Capitalism about Jack Welch, and he was incredibly money focused and he basically just caused immense destruction because GE has collapsed since he left. And it was all this unsound thinking, firing people right from the center, not having any concern for the people who worked for and tens of thousands of people losing their jobs, destroying whole communities.

And just I, I had him at my event, I interviewed him. JACK WELCH FORMER COG I had him at my event about four years before he passed away and he was, you know, always cutting to 10% and he left at the top. But the next person, Jeffrey Emmett, inherited a lot of the problems. He left as a hero and G has never recovered since they.

I think, I think he was a very destructive figure. And that short term thinking, this idea that you fire 10% of everybody in a department every year is gross. It's pathetic. I take enormous pride in the fact that our turnover of staff is very low. And I go around and talk to my individual staff, we have about 100 on site and ask them how they're doing, how they're being treated and we provide them with lunches and stuff and then just what can make this better for you? You've got to focus on your people first because focusing on money first is really bad idea. Look, God gives us money as a. Is a trust. It's not meant to be used for our gratification. It's what we can use it for, what good we can do in the world.

Jim, how much of your thinking money is just miserable? How much of your thinking is old school versus you also talk a lot of the youth. I'm sure a lot of people write to you, give me some advice and I resonate very much with you. I value loyalty. It's why I like hearing this. Because many of the successful people that I know and some I partner with, some billionaires, they're saying the exact same thing that you do. I just don't see that in the younger generation now. And you know, you take a look at the NFTs, right, everybody was going to get rich NFT and that just completely collapsed and maybe there's some point it'll come back down. It's just. It just doesn't seem that there's not the same value system as you do. So when you talk to the youth, what is it? Is it a. Do you think that it's the way you're brought up, the way you are and do you see what you have into the younger generation? Or are you. Or we're in trouble.

I can't speak generationally. I know my franchisees on the whole tend to have similar kinds of values. Like when there was bad times, when we had lockdowns, like in 2000 and we had. Melbourne had the worst lockdowns of any city in the world, which is ludicrous. It was a stupid action on behalf of our Premier and I got really angry at him and made a lot of fuss.

The one that fell down oh yes, it was appalling.

The point of it is in that situation which was awful, what you found is tremendously like there was a young lady who was a dogwashed franchiser who couldn't work and she was a student so she had no income at all. She was threatened with eviction from her home. Other franchisees just rallied around her. They gave her food vouchers and offered her help and all kinds of things. We said if you get kicked out, you can come and evicted, you can come and stay at our conference center. But so the way people look after each other in gyms is very inspiring. So new franchisees come in and somebody go to a meeting and people will help them and they'll advise them and they'll bring them up and talk to them. I find that spirit quite widespread in gyms and I take pride in that because it's my values. And look, fundamentally they're not business value, they're Christian values. If I looked at anything that's the basis of what we do, it's Jesus washing his disciples feet. The idea that we as franchisors are servants to our franchisees. We serve you. I tell them a training. I hear you're not, I'm not your boss, you're my client. My job is to look after you and make you successful. You ring me anytime you want to because I want to see you successful. And I talk to as many as I can and I really.

Jim, you were, you, you were atheist at some point and you converted back. And so what was the I don't believe to all of a sudden I believe. Usually it's like I believe and then I no longer believe. What was the, the, the, the moment that made you, by the way? I don't know. Have you read Chick Fil A? Because it's the same value system based on Christianity. It's very interesting. It's very similar to what I'm hearing.

I'd love to read about it actually.

Yeah, I will give you. It's, it's, it's, it's exactly the same. I'll, I'll tell you off air the whole thing. I really think it's. What you're saying is exactly what he says and he's obviously a billionaire and not going to give it to his kids and just giving it back. And, and there's that, you know, people say well the franchise all seem to be of that value. But what was that moment that, that changed it from not believing to believing?

I don't think my values changed. I think Christian Values appeal to me. But look, really what happened. When I was 20 years old, I was a fairly militant. You might call me anti Christian, actually. I go and argue with people about why you should believe in God. And I just got to know some people in the Christian Union at the university, and I went on a treat with them. And then I thought God called me. It was very simple and very dramatic. So I sat down, atheist, got up, a Christian, and I have been ever since. So it was that kind of experience became very fervent. I mean, I suppose I throw myself into whatever I do in a fairly extreme manner. Not always. Not always successfully, but that's just. That's just the kind of person I am.

So have you made business mistakes? If I say to you you made mistakes and decisions that turned out to be not very good decisions, but they're good learning experiences because we've talked nothing about success and greatness and things like that. Is there business moves that you probably regretted that you hadn't made?

I could write the book on mistakes. I have made so many stupid mistakes. One of my major problems is I tend to jump into things without counting costs and planning stuff. I get involved in stuff like I tried to run. Set up a psychology institute and run a factory and all kinds of things, a tourist resort. I've done a number of different things which were completely disastrous, even in recent years. One of the worst mistakes that I made was I had somebody in charge of my IT software development. We spent about $5 billion a year on software, and I had the wrong person in charge and we were paying too little and I didn't recognize it. It cost us a fortune in all kinds of ways. We've now got somebody just for the last few months. I think it's very, very good. But I've made so many dumb mistakes. Look, I had no clues that I was doing when I started this thing. I didn't understand what franchising was. I didn't understand support. I didn't really understand that you had to have regular meetings, for example. I didn't understand how much of franchising is to do with that sense of community and mutual support. Things like ringing franchises regularly, which our franchisors are required to do, you know, ideally weekly, at least monthly. We didn't understand that. We didn't know what we're doing. It took us a long time to figure out how to do this thing properly, and we're still working out every day figuring out how to do it better.

Jim, how much of those books behind you are actually business books. Did you study the art of business customer experience, for example? I have a friend, his name is Jesse Cole, right. And he runs a minor league baseball team. And they call themselves the Savannah Bananas. And most minor league baseball teams maybe have 6, 700 people. Nobody goes. This guy goes. There's 4,000 people. It's packed. Because it's an experience, right? And the whole idea is fans first and, you know, all you can eat food, which is all contrarian to a normal ballpark experience. And then, you know, people are dancing on the field. And to be honest, I went there. It was way more fun than a normal baseball on a professional level, which bores me to death. And so even though I'm not in that business, I'll study the Chick Fil A, the chain that. Which you got 2,500 locations now, which literally is, you know, one below McDonald's now, right. And overtake Burger King just by, you know, it's interesting because they do things that, you know, I like, why is McDonald's not doing it? Or why did Burger King not do it? They just, you know, tastes like grilled nuggets. Like, not fried, but grilled, like, or more healthy options. So. And I take a look at. I learn a lot from other businesses, and I apply to all men and businesses. Do you study the art of the business and immerse yourself? I know you say Jack Welsh anymore.

I would say probably 10% of my reading would be about business directly. And before I started, the only actual book I'd read about business with any min was behind the arch is about McDonald's. Most of what I read is about economics, public affairs. I'm listening to a talking book about Donald Trump right now about his career and so forth. And I love books like Atomic Habits, about how to become more disciplined. I'm really interested in happiness. I'm very interested in scientific advances. I read a lot of biography and history. So I read very, very, very widely. I probably read two or three books a week.

Oh, wow.

Read or listen to some and. And news magazines and stuff too. So I read and listen to an enormous amount of stuff.

So maybe I'm gonna let you diagnose me. So I'm gonna. So I suffer from, like, I'm totally not motivated by money. Same thing. I have so much of it, but I'm not motivated by money. But to me, I'm motivated by the deal or the opportunity. And the minute I get it, you know, I settle up and move on. And it doesn't satisfy me. Right. But If I don't do well, it just bothers me. It'll eat me alive. Right? So I hate losing more than I love winning. And so I love business. I mean, I did acting in a major Hollywood movie last week and I did really well, but I don't love it. So. And I'm being offered parts and it's not what I do. I did it on the side just to see and it's not my thing, but I love business. But at some point, like for you, like 5,000 franchise, like okay, you know, 6,000, 7,000, I mean, does it do it for you anymore? Or there you have to dig deeper down to find even greater meaning as well. Because I'm almost desensitized.

My meaning is never in the numbers, not in those numbers. My meaning is the 8%, 8% of franchisees reporting poor income. That's my obsession. It's very, very personal. It's each individual person. Look, the greatest buzz for me is to hear from somebody saying that they're doing well, it's changed their life. Like a story. I bring a guy who's a 10 year veteran and he and I ask, how'd you get into it? And he said, well, as a manager with a grocery chain. And I was, but I worked really long hours and I never saw my kids. And he said one morning I was leaving to go to work first thing and my 4 year old son said to me, daddy, I wish you could have breakfast with us. And he drove to work and he said the tears were streaming down his face. So he quit his business, quit his work, bought a Jim's mowing franchise. And he's seen that little boy grow up. And I said, you ever thank him for that comment? He said, every day I thank him. It's changed his life now. His income was actually pretty similar to what he was getting as a manager. But he sees his family. To me, that's wonderful. That's worth more than money. Money has a very limited relationship with happiness. It really does. People think you've got a big, big house and find a car and stuff, you're happy. No, you're not. No, you're not. Money is as far as it produces happiness. The best thing you can do with your money is to give it away. That's something you're involved in. And this is not, this is not ideology. This is what scientists have found out, studying happiness. So what we want to do is to help people to live a better life. And that is a crusade. It's not a once off thing. It's not achieving a certain level of income, it's doing something worthwhile helping thousands of people. And even more with my research that I can help, I can help billions of people potentially. That's what drives me. Never a financial goal never lasts.

You a question. What's your greatest strength as an entrepreneur?

Very, very, very innovative. I'm creative to an extreme extent.

Can you give us an example? Can you give us an example? Lately.

Starting up a registered training organization and with the idea that we'll train people very, very widely in tasks and then we'll show them how to run a business or join our business or become workers for our franchisees. This is an innovation that, that mission. We've got a system for software development we're developing which will revolutionize all kinds of things and giving advantages that people just.

So even though you're old school, you're all about technology, right? Sometimes, sometimes the old school, older people, they, they don't. So you've really embraced the idea of technology which is very.

Oh yes, technology is absolutely key to success. What we do you could not do. Like we have a system when a person rings, a client rings, it actually goes into database and it checks things like are they a previous client should go back to franchisee. And then we look at, okay, what's the job, what's the suburb, what's the service code they want done. And then the system automatically looks at all the franchisees who all got their individual requirements down as to how much work they want, what services, where, when, and then it finds the one that can do it. There might be 20 franchisees in an area, but you'll pick the one that technology is crucial to what we do. And then every Friday and every customer gets a survey afterwards asking them how they went and that gets fed back into the system and then the complaints are registered and the things happen with that and then they get rewarded for the great service and so forth and recognized for it. So the technology is very, very powerful and we can actually cut people's work time down to a fraction in terms of their administration with the right software.

And what's your greatest weakness as an entrepreneur?

I've got so many. I'm a terrible manager. I'm really shockingly bad at managing people. I'm just bone idle lazy all the time. I just don't work hard enough. I got very poor people skills. I lose my temper easily. I have to really watch that all the time. I can't remember faces. I got a mild from a face blindness which is terrible in My opinion.

Steve Wozniak, Apple co founder, is the same thing.

Yeah.

You're not the only one. You're in great company.

Yes.

Brad Pitt also has the same thing. So you, you, you Brad Pitt have this exact same condition. So.

Well, yeah.

I mean that's, that's not bad, you could say Lito. What I. Brad Pitt has the same thing as me?

No. Nice to have something in common with Brad Pitt. Certainly not looks, that's for sure. But I, I have so many weaknesses. I'm very impulsive. I just tend to jump into things without, without thinking about it. I've learned to quieten down. But, but I can make the most dumb decisions. I mean, I don't know, I look at myself often and I say, how on earth can this idiot ever been successful?

So, so are you like if, if, let's say I was working for you and I had a. I. Jim, I think you're wrong on this. Right. Do you like allow the feedback or you're like, hey, I'm Jim, I know what I'm doing and stuff like that? Or do you, do you.

Oh, no. Constant feedback. Listen all the time. I listen to my staff obsessively. I'm always driving for things better, but I'm always open to ideas. That's the reason, one of the main reasons why every franchisee has my phone number. It's so I can help them if they need to. If something goes wrong, they'll get to me when they can't reach anybody else that I'll make sure it happens. But also because they have ideas. The systems that we use, like our ability to vote out franchisors, for example, that comes from franchisees, from their input as to what they want and what's going to work for them. So I'm always, always learning. There wouldn't be a week go by I don't learn something from my franchisees about how to improve my business. So I listen all the time, I read all the time. I listen to people. I ring people up and ask them how they're going. I wander around, ask my staff how they're going. I had a chat last night with one of my, with one of my people in it. Just ask his advice about what's going on. What do you think should happen? How should we do this? This is not one of my managers. This is somebody who's more junior but I respect, he's a long term valued guy. I just asked him what he thought we should do and we're going to do it. We're going to make a change in.

The company as a result of that Last question. You obviously had views that a lot of people agree with you in Australia, but others may not in terms of COVID And so as the face of the brand, you saw what happened with Kanye. All of a sudden, Kanye goes out. The brand is there. Some might argue whether people love Donald Trump or not, it has affected some of his assets, where people are like, will not go to a Trump hotel because it's Trump, even though the hotels are beautiful and they're fantastic. So do you think that you have a responsibility to be sort of politically kind of neutral opinion neutral, because at the end of the day, if people disagree with you, they may not want to hire Jim because of your views. Do you think about that? Or at this point you're like, you know, I am who I am and, you know.

I. Look, the thing I'm most most vocal about is things like, I get very upset when my franchisees were cut down from being able to work because of COVID There was no reason for it. And lone lawn mowing contractor, fence builder, whatever, working by themselves, not contacting client is no change in public health. I got really angry, made a big public fuss, gotten all the media, tv, everything else here. I took a stand because it was for my franchisees benefit. And don't forget, they're my first priority. More than clients, more than anybody, my franchisees are my driving force. Now. The interesting thing about that is that even though at the beginning it might be very unpopular, two of my daughters wouldn't speak to me for months. In the end, we carried the public with us and they would say things like, yeah, we agree with you, Jim. Even people on the left, even people who supported the very lefty premier we've got here said, yeah, it's stupid. How come council workers could work in groups and your people can't work as individuals. So actually built tremendous goodwill. So I'm seen as a kind of a voice for the little man in a way.

Yeah. Oh, very interesting. Last question. So what do you think of this interview here? So I believe that when we first started talking before. And by the way, thank you to Rob Evans, who have set this up. Great, great entrepreneur out of Melbourne, owns a fitness facility who's just amazing. And properties as well now. So he connected us and we both. He wasn't there, so we both kind of got in and I felt that first it was a little cold, a little bit, and then we eventually warmed up and I'm like, man, this guy is Fantastic because we got on the zoom, we, we didn't know what was going to happen. It was not even an interview schedule. Now we've done this interview, we've got a chance to get to know each other. What did you think of the interview? How would you describe the experience of us in the interviews? And you've done many of them, so be curious to your thoughts.

That's good. It's interesting. You ask different questions. You ask about things like motivation and so forth, which I enjoy I guess the same questions a lot. I love to talk in different ways and I think source of your values, that kind of stuff is very important and you get some important stuff, not just the technical things of business but the values behind it, why we do the things that we do.

So I think the lesson everybody listening to get to the heart of someone like Jim or anybody successful when he's used to answering the same question 4,000 times which you easily could go on Wikipedia. It's very detailed about everything. And clearly when I brought the atheist, you probably know I did my research and so. But I think it's important for people to know that you have to put effort and you have to watch and you have to really understand and knowing your audience because if it's boring for him, look at the time and I can't believe 49 minutes in a row it's gone super fast. And I, I want to say that I've learned a lot in a very short amount of time from you and I hope we keep a. A relationship. And I recommend Everybody go to jims.netjims.net and there's also a place there where you can sort of listen to an audio of his biography, his philosophies, his other books. It has other past this his and, and I think it's, it's a very simple website but that really impactful. It's a very warming to it. I think a lot of you will learn and whether you ever want to start your own, do your own franchise or just start your own business, I think Jim did a phenomenal job and whatever he taught here applies to everybody else. And, and you know, nobody's perfect. He's perfect. He's not perfect, I'm not perfect. But when you have a core mission which you really stay true and everything revolves around the franchisees, you build a very successful business and the result is a billion in sales, 5,000 people and maybe your daughters or sons will be mad at you for two months but in the end, you know, when you do the right thing in the right way for the right people. I think you win. So I'm going to give you the last word here on this podcast. You just what do you want to tell the audience? Inspire them. And so it's been a phenomenal interview, but I'm going to give you the last word.

I just think it's important to live for something more than money and more than yourself. I don't think money makes people happy. I think we should have a mission, we should have a purpose in life. And I'm a very happy man. I'm very fortunate, I'm very blessed. And it doesn't result from having expensive lifestyle. It comes from having a sense of meaning that every day when I get up, I have a meaning to my life. I have a purpose to live. And that's great. That's a wonderful way to be alive.

Well, there you have it. By the way, if you like the show, subscribe, leave some comments. Please share it with somebody else. A lot of entrepreneurs get a lot of value. If you also know someone in Australia, New Zealand, please send them. Definitely send them the copy of this interview as well, because I'm sure they know who they are. But maybe this philosophy will encourage them to, you know, be part of a community. I think this is not just a business, it's a community as well. And on tomorrow's show, we're going to talk about how to make a lot more money, not feel guilty about it. We're going to Teasing Jim. I'm just teasing Jim's face. You guys should see Jim's face. He looked at me like, what is he talking about? I just wanted to put a little humor into this as well. But thank you. Thank you for inspiring us all over the world as well. And we should be so lucky for those of you to have a gym in your local area that cares more for you than maybe sometimes your own family and friends do. So remember that as well. That's the fundamental process of this as well. And always sharpen, always keep reading, always keep investing in the greatest asset, and that is your mind, your values, and stay true to who you are. Thank you for Beyond Success is not a matter of chance. It's a choice. But it comes from having the right value and the right people. And Jim has definitely done that. Thank you, everyone, and we'll see you tomorrow.