#ASKJIM 15/11/21 Replay with Jim's Group CEO, Jim Penman and Joel Kleber

You always come probably a minute or two just before seven. I don't want to call you to annoy you because you're running down. So this. This is the one time it's probably my fault. I didn't mention it today to Jim in the office. And we just had training.

I should put it on my diary, my Apple calendar. I should put it in there with training.

Yes, absolutely. So thank you for coming here, Jim. And you came here pretty quick. Within a couple of minutes I ran. You really did run down. So thanks everyone waiting here. So guys, if you are got a question tonight, it's fantastic. Jim's just in here in the studio and hopefully the next one at training will do it with the people there if we're allowed to.

That is certainly. That's certainly good experience. I like it with.

With the audience. Because in Victoria you do have people in training today, don't you?

So, yeah, we have about 25.

Was it 25?

I think so.

Okay, cool. So it's 25. You are in Victoria thinking you can come here. We want you here. And yeah, if you're on interstate, there's a live stream as well.

We should have had New South Wales here too.

We're allowed to now, are we?

Far as I know we are. Yeah. Okay, so next. Next training, we should have. We should have an audience.

And did you have a lunch today with everyone or was that allowed or.

No, I didn't.

No, not today.

I just didn't make it down. I had to put.

Cool. But if you are coming to training, guys, one thing you don't want to know is we do a Q and A for an hour. Private Q and A with Jim and just franchisees only. So it's a really good chance.

And which goes down very well, actually. In fact, we started. We had a pretty short one, but we found actually got longer. There's a lot more questions. So it's.

I like it.

Actually, I find it more interesting than giving the same talk.

Absolutely.

Not that I mind giving my talks.

But still very true. Then Jason Pollock's going. Unlike Jim, to be like, yes, it is Jason. We leave it. We generally. He's always here a minute or two to go. So I don't.

I live next door.

Yeah, exactly.

I've got no excuse. Normally I'd have a on my phone to remind me five minutes, bang, I'm down here. But not today.

That's my fault. So guys, if you are watching, make sure to leave a question or comment. And just another thing as well, we've got Jim's jabs merch, which is going like hotcakes. Still. We've got bigger bumper stickers. I'm just waiting for finance to pay the bill. So there's come as well, because those. We've done a thousand bumper stickers that went in eight hours. So we've got some more coming, which is some bigger ones. So make sure you keep an eye for that as well. All right, Jason Sneezebee's gone here. Does Jim do sponsorships? Question mark. Does Jim do sponsorships?

No, not really.

Do you want to maybe say why? Because we get that question a lot.

Well, first of all, if it's a charity. Okay. My view of charity is that you should. It's the Gates foundation idea. What you should do is figure out where your money can do the most good and put all your resources into that, rather than just sprinkling out over a whole variety of causes that you don't really know very well. So from a Cheryl point of view, I have my research foundation, which is looking at the epigenetic basis of behavior and I think has tremendous potential to cure whole lots of things like drug addiction and so forth, alcoholism. So that's from that point of view. If you're talking about it as a commercial venture, to be honest, it just doesn't work very well.

A lot of franchisors do sponsor local footy teams and all sorts of stuff.

It's up to franchisors what they do, because that's their particular thing. Or we're a little bit cautious about it with franchisors spending advertising money. Because what we find is that, for example, a franchisor will sponsor a surf life. They've been club. And a basketball team happens to be the clubs belonging to their children. So we actually ask them to get a vote done from the franchisees to spend money in that way. On the whole, though, sponsorship doesn't actually produce a very good return as we're defining our franchisees work. It's not the best, but Jason, we.

Get asked all the time, but we promote anything. Like we have causes and stuff that people ask us to promote. If it's like some sickness or GoFundMe and stuff, which you have done a few times.

The one cause we tend to promote within gyms is beyond blue anything to do with mental health because it's something that affects us so strongly. It's one of the major issues we face, mental illness. So we do tend to support them in various ways.

So Paulie Clark, he's gone in. Hey, Jim. What's been the hardest decision you ever had to make? And Paulie's Jim's close franchisee in Sydney.

The hardest decision I ever had to make?

Yes.

I don't know.

Good question.

Yeah, you got me stumped there.

That's only the second time in probably 108 of these you got you stumped.

I don't find decisions that difficult actually because I tend to decide things very quickly. I don't hesitate over decisions. I just decide now quite often I decide wrong, but then I just have to work out a way of getting out of it. So it probably would be fair to say that I don't really have any hard decisions because at the time it usually seems obvious. I'm very, you know, let's do this.

Very quick, aren't you?

Yeah, I'm very quick. You ask me and I'll get a reply. We think of a new idea, something to do with the office and we just chat about it. Let's do it. And we just go and do it.

That's it.

And sometimes it works and sometimes it doesn't work. Like with Jim's jabs, you know, that was just a come out of a discussion that Rocky and I had one night and then we decided to launch it, give it away. That wasn't particularly hard. We didn't know it's going to work actually. In fact it's worked very well. We've had an incredible response to that, but who would know? But sometimes it's better just to try something and then, especially if it's not too expensive and then just see how it's going to work.

Well, if we did that again, we would have set up a whole bunch of systems to taking the, the orders and all that sort of stuff.

We had no idea what the response would be. I think we ordered about 200 shirts in the beginning.

The run was 200 and we went through around half of them. And then you go to me when you get these moving, I said, we'll do another video. I said, I'll try something bit different on the hashtags. And then. Yeah, it worked. So went berserk. Got more stickers though coming. Good question though, Pauly. So we got one here from Dave McDonald. Jim gets a one star review on a complaint for being late tonight and not sending a message. Lol. Well, we had Ben via proxy, sort of do sort of worrying where. Where Jim was. So yeah, you're true.

Mind you, if my franchisees were always within two minutes of their posted time, I wouldn't be too upset. With them.

Absolutely. So guys, if you are watching remotely tonight or if you're on from training, let us know. We've got a great opportunity to ask Jim a question. Questions. Put them in the comment box here and we're probably going to get to them tonight. Ben, make sure you scan the other pages as well if you can. Cool. We've got one here from Haydar saying hello from sunny Cyprus.

Oh, Haydar, you got there okay. I hope you had a good trip, Haydar. And he says he gets his best ideas on the plane. So when he's flying. I don't know why I hate flying actually, especially long distance.

Well, I've heard a few things from people like riders and stuff. And they say they write because they're forced to do nothing else but do that task. So they tend to do it better when they go to planes and stuff.

Well, Haydar's very good at ideas, actually. He comes up with a lot of great stuff. We were talking about it. He actually had a bit of conversation with me before he left last week and he was saying he's a bit worried that I might want to buy him out or something. And I said no. My best franchisors and divisionals are actually a tremendously good source of new ideas. I used the McDonald's example where they started off franchising and then they started setting up company owned stores which actually worked quite well. They were quite well and quite profitable. But if you get too many, you lose some of the creativity that you get from the franchising system. So we have the same thing about franchisors. We've bought back quite a few regional franchises, but we've got some really, really great franchisors. People like Haydar and Ali and Sharon Connell and Brett Blair and Paul King and a lot of those other really great guys. Dan Carroll, now, I'm sure he'll be fantastic. So it's great to have them. And they come up with different ways of looking at things. So a lot of the stuff we actually do in gyms, you know, in terms of things like proactive calls for example, that we found to be very effective, didn't come from us, they came from franchisors.

So. Yeah, I know. Hey, I can hear in the background, but it's raining here. Jackets inside in the middle of. What is it? Oh, middle of November.

I'm sure you're missing the. Missing the damp and rainy Melbourne weather.

So he's got a beer.

He's got this beautiful beachfront place.

Yeah, I know. It's like an apartment or villa or something. I've seen a picture of it. Yeah, it looks really nice.

It does too.

So the money from Steve Reardon's gone here. Jim, how has your day changed since we've exited lockdown? From Steve Reardon, how's your day changed since we've exited lockdown? Chuck a question in there, guys, or comment if you've got one.

Well, it's good actually having more people in the office, I must say. I like the interaction. I mostly work from home but I like to come down into the office and just chat with people and often I find that when you don't do that, the zoom and the stuff and the phone calls and the emails, it lacks something, I reckon. I like having an ichat with yourself. We're always talking about social media and Jim's jabs and all the things that are going on. There's a whole lot of stuff we're doing and talk with Rocky about divisions and how to make them work and talk to the girls about divisional support and so forth. And I go and talk to the Jim's plus people and then I have a chat with Cynthia in finance about. I like that kind of stuff and it keeps me in.

It's good, but it gives you more background as well. Like an email can only say so much or a phone call. Rather get that face to face discussion, you know, five minutes, 10 minutes.

I think you could work a lot by yourself and it's good, but it's also good to have interaction. It's a bit like what franchisees do. I mean they're out in the field by themselves for the most part, but if they're sensible, which most of them are, they'll come to meetings. Why? Because meetings is when you get new ideas and change, change things. And if you don't go to meetings, you don't tend to get that. You'll tend to just stick in your. I find the same, much the same thing with myself.

It's gonna be interesting thing with the work from home thing, how some people might love it but you gotta have that interaction. Just I don't know how you can't.

Do a combination of both. Seems to work very well and depends on the division too. Some, some people like the Jim's plus girls love coming into the office. A lot of the finance girls too, whereas IT guys, they don't like.

They've got no Social Security, they're nerdy introverts.

That's why they're all I got. None, none at all. No personal skills. Whatsoever, most of them. Sorry guys, if you're watching, but it's true. Good chess players though.

And there's someone from. Lisa, Danny Williams gone. Can you hear me? No, we can only we can if you put a comment in there, Lisa, I can see it. So I know Ben's trying to scare me on commenting, so put your comment in the Jim's Group page so we can see them real time. If not, Ben will have to go around to all the 30 pages and scan them. So we've got one here from. Here we go. Chris Gordon's gone. Jim, how do you think you'd go if you were looking to enter the property market today from Chris Gordon?

It's scary, Chris. And the one thing that's really unnerving is that property prices have been bid up so high on the basis of ultra, ultra low interest rates. And the trouble with that is inflation is starting to take off. Now whether it will take off completely, I don't know, but I don't have any long term faith in the stock stability of our currency. And the trouble with that is if inflation takes off and they raise interest rates to any significant degree, you're going to find the property market potentially crashing. I find it very unnerving as a possibility. I wouldn't want to have too much exposure to property. The only thing I would say is if you've got property and you're looking at the rent coming out, that's fine. But if you're buying property with the idea that you can sell it at a higher price, that's, that's risky stuff.

It's an interesting one, isn't it? Like what's, what was. But I think you'd be right, you're a big saver anyway, so I think you'd be all right these days, to be honest.

Look out. Our borrowing is very minor. We really, we very, very little. So if interest rates doubled or even trebled, it wouldn't worry us too much. But for a lot of people that would be disastrous if. I think it's a shame, actually I think it's terrible the way property price has gone up so much. A lot of that's got to do with stupid government policies like restricting the sale of land, covenants on the sale of land so people can't afford to buy houses. It just shoots up the property values all the time.

The foreign investment for me is the big one. Foreign investment from overseas. They get their money out, put into the property market here because it's safe. That happens all the time.

Look, it's just next to this place here. This has got five bigger covenants around where we are. If you go to the bottom of our property, there's these five acre lots with nothing on them. There's no houses, no nothing. Somebody's sitting on there waiting for the. Waiting for it to be rezoned or whatever. Rezoned? I mean, people could be living there. We could have hundreds of people living around here. It just. And we're sort of like five minutes from the station. Shops, employment offices, all kinds of things. So why don't people, why aren't people allowed to live here? It's a really bad idea. And what you have to do is you force up the price of housing and the people who can't afford it have to travel way, way out to Woodpoint and drive in to work every day, you know, pumping billions of tons of carbon dioxide into the air every year. It's just crazy the way things are. It's so wrong, it's so unfair.

What about a hedge for poll, hedge against inflation? What would you be doing? A lot of people doing crypto for the hedge against inflation. Bitcoin.

Never crypto. No, I do not believe in that. It's just, it's just gambling. It's fundamentally immoral. It's got no productive value at all. Certain forms of crypto has in terms of things like contracts and stuff. There are, but as a currency system, it's awful. It's pure speculation. I would not touch it. I would never touch a thing like that. If I'm going to invest in something, I need to see valued. Because what we do in gyms, it's got value. We get great service to clients, but even more than that, we give a great potential to our franchisees.

What would you be hedging though? Would you be buying gold or would you be buying silver?

I'd buy Jim's regional franchise.

There you go. There's your head against inflation.

And I would also. What I have been doing is investing in my own business. I'm buying, buying back regional franchises. I'm investing in growing gyms. We're actually going. We just hit 4500.

I should have mentioned at the start, we hit 4506 today, the first time.

Which is a real milestone. And next year we're going for the big 5,000. I'm investing very heavily. We're spending $5 million a year on IT development, which is an investment in the future. So to me, the best hedge is a business that you're involved in. If you can do that, well, you can't be sacked.

So when the crunches come on businesses and they get rid of people like, you know, you can't be sacked from your own work.

It's a very exciting time to be in business. I've been reading this book called scaling.

Up by Reid Hoffman.

Yeah, yeah, that's right. And talking about all the different businesses that have started from almost nothing. So my daughter Jasmine, who's 21 years old has started selling candles and she's got a way of doing it with using non paraffin type candle wax and different kinds of scents and so forth too. And that's doing quite well now. That's little thing but it could be anything.

That's right.

And Jasmine's. Jasmine's wonderful. She's amazing. I think I can see her being a great entrepreneur.

Who would have thought with you, Jimothy, 30 years ago. That's right. You're right.

Who would have thought of me?

What's this bloke doing? Walking, you know, away you go. So you never know. We've got one from Gail Trent has gone here. Jim, have you watched Succession? Best show on telly right now. I love Succession. It's a good show. I reckon you'd like it.

Succession.

Yeah, it's a great show.

What's it on?

It's sort of based on, I guess on like the Murdochs and like this guy has this big media empire and his four kids are trying to stabilize.

What streaming is it on?

Binge. Binge. Binge gets all the HBO stuff, like curb your enthusiasm and all that. So I reckon Binge is the best streaming service in my opinion. That's just my.

The trouble is I don't have much time to watch television anyway. I might watch an hour a day.

Yeah, I reckon Succession be interested.

Yeah, I'll think about it. I have to have to get binge. We've got Stan and we've got Netflix and we can't even watch what's on that. We're actually watching the one started watching last night, the one about the start of Cleo.

What's that one?

It's. It's about Ida Butros and the founding.

Of the ABC at the moment. Ida Butros? Not a fan of her?

Well, yes, in that particular thing, but as a business startup story.