Jim Penman's inspiring lecture at the Franchising Expo 2024 on life and his franchise journey

Okay, so we're out for a special treat next we have Jim Pen in here in Jim's group. Raise your hand if you've actually heard of Jim's group. There's a reason for that. It's the largest franchise group in the southern hemisphere. I'm going to guess probably one of the largest in the world. We've got over 5,000 franchisees. I think it's close to five and a half. I'm sure Jim will tell us the exact number, so I'm not going to give you a big introduction.

All right, thank you. I think I've got all this. Welcome Jean. Thank you. One of my jobs is to phone my franchisees on key anniversary, like 10, 20, 30 years. Remember one particular discussion, I was ringing a guy on his 10 year anniversary and I asked him, as I often do, what got you in this business? What were you doing? And he said, well Jim, I used to be a manager of a supermarket which was actually an iga. And I said what happened? And he said well, I was making good money but I was working very, very long hours early in the morning into the evening. And one morning as I was just about to leave to work, my four year old son said to me, he said daddy, I wish you could have breakfast with us. And he said he drove to work and the tears were streaming down his face and quit his job and bought happened to be a mowing franchise. And ever since then he's been able to see have breakfast with his son every day. I said do you ever thank him for that conversation? And he said every day. Now I'd like to say he's making a whole lot more money than he did in his previous job. In, in fact he said about the same in net terms. But there is a saying that I really love and it goes like this. No other success can compensate for failure in the home. So today I want to talk not so much about business, even though that's why you're here, I suppose. But I want to talk about happiness and meaning in life. People have a lot of very wrong ideas about what to achieve. That one of the greatest misconceptions is that being happy means having more money so you can have more stuff. Now having a good income does matter. Let me make that clear. If you've got less than about the average Australian income, about 75 grand a year, you are likely to be struggling. And one of the aims for our franchisees is that they can make more than that. Our actual average, as far as we know from recent surveys, is a bit under $3,000 a week, which after expenses and so forth comes out to about 100 grand a year. So you can make a good living. Having said that, some of our franchisees have done very well. We probably, we believe, created more millionaires than any other company in the country. But making a lot more money than the average income doesn't actually have as much effect on happiness as you might think. It's a bit echo, isn't it? Yeah. Do you want to turn this one off? Okay. All right. Is that better? Yes. All right. And what we've found in particular this is from scientific studies is that spending on status goods has very little relationship to happiness in any way. And I mean, I mean goods that give you an ability to be better than somebody else. Like you have better clothing, you've got a better car, you've got a bigger house. In fact, they even found that winning the lottery has no long term effect on life satisfaction whatsoever. Far more important than that is experience. If you are going to spend money, it's better to spend it on experience, on doing things with people and particularly with your family. But you know what they found? The actual number one area you can spend money on that creates happiness. It's actually giving it away to a cause that you're involved with, which is not what people think. But that is according to what scientific studies of happiness and satisfaction have found. That happiness has got a lot to do with community, it's got a lot to do with family. Married people are happier than those who are single. People who have friends. People these days have less and less friends. Even compared with 20, 30 years ago. People are much less likely to have friends. We're not as part of our community as we should be. So one of the best guides you can possibly do to achieve happiness in life is to actually be part of a community. Now, if you're like me, if you're people of faith, you have the option of being in your local church or temple or mosque. That is a great source of community. But there are many wonderful communities around. What else matters? Health matters. Now, one of the greatest mood improvers you can possibly have is exercise. It's been found that exercise has far more effect on happiness and well being than any antidepressant on the market. Antidepressants have very limited value. Regular exercise, always, every day. I make point of having at least half an hour of exercise, plus weightlifting, plus I do a lot of walking and gardening and stuff too. It's part of it having a good diet, having a diet without Too many saturated fats and so forth is good for you, good for your health, good for your mood. And that means having enough vegetables and fruits. And that's something also that I'm very strong on. Not having too much debt is very important. Going deeply into debt to buy stuff is a really, really bad idea. Also, commuting, surprisingly enough, the distance that you commute has a dramatic effect on lifespan. They found that an hour a day spent commuting, extra day back and forth is equivalent to about a $75,000 drop in salary. What I would like to say about all this is that a trades business. I know there's a lot of businesses around here who aren't trades, but a trades business actually can help you achieve a great deal of that. A good trades business should be able to achieve a decent standard living. We aim at gyms for a minimum of about $70 per hour. We would not accept a new division where we couldn't see that level of income coming out of it. Also, trade business tends to be healthy. It has to do with moving. It's flexible enough that you have hours to spend with your family and so forth and with friends and doing other things that are more important. I don't believe that working incredibly long hours to achieve success is a good idea if it's at the expense of family. So let's talk about being successful in business. There are certain principles that we found to be very, very helpful. One of the major ones is the level of customer service. Now, we at gyms have fairly strong standards. Sometimes franchisees feel they're too strong. We've found various things show that this is an incredibly effective way to run a business. We found, for example, that when it applies to success long term in business, the better your customer service, the more likely you are to stay. Our first year attrition rate is around about 12%, which is a lot better than most independent businesses. But we've also found that people who leave in the first year tend to have much lower levels of customer service than those who stick around. We've also found that franchisees who do very well in customer service are far less likely to report poor income. We've also found that as we as a company have improved our level of customer service and we have a number of systems to do with recording of complaints and to do with surveys and so forth. The ease of finding leads has dramatically increased. For example, in the early days of humans, we used to have people canvases knocking on doors to find work in those days, mainly mowing. In recent years as our levels of complaints have gone down, we measure this stuff very carefully. We found that the volume of leads per franchisee has driven dramatically to the extent that last year we had about something over 200,000 unserviced leads. And this problem has become so strong in certain areas that we've actually had to give back money to the franchisees because we can't spend their advertising dollars. That's an extreme change. People talk a lot about branding and imaging and so forth, but the biggest single thing to success in any business experience your customers have with you, because if you do great work, you can get repeat clients, maybe regular clients, you can get referrals, you can upsell the different jobs. This is all part of being successful. Now, just a little bit of word about finding what kind of business to go into. I'd say for a start, franchising is not for everybody. That's probably heretical and environment like this. But some people simply are not suited to be part of an organized system where you follow certain kinds of guidelines. And we have this. I had a. I had a contact just in the past week from somebody interested in starting a franchise division. And after a brief exchange of words back and forth, this guy was trying to tell me what I was supposed to be doing, how it was supposed to be run, everything else. And I said to him, you're not really suited to be part of this organization. You have to be prepared to accept that there are certain limits to the way you operate. Some people aren't. I doubt I would have made a very successful franchisee. I'm too much of a maverick. I started part time as a student, so it was easy to get the business that way and then learn it and then went full time in 1982. As to what kind of business you go into, a lot of it's got to do with what you like doing. People often ask me, what's the best business where you can make the most money? That's not an easy question to answer. There are certain divisions that we run, like antennas, skip bins, trees, where the individual operators make more money. But the actual top earners, the people who make million, $2 million a year turnover, and there are a few, tend to be in businesses like cleaning and mowing, which have the option to grow and put actual workers on. But the principal thing I'd say to anybody looking at going into business is that you should love what you're doing. So if we say somebody says, I love dogs, dog wash is great. I really love cars. Cars. I like Gardening, being outside, that's mowing is a good one for you, frankly. For me personally, I love. I was a contract lawnmower contractor 15 years. I love being outside. I still do gardening as a hobby, so that's a good business for me. So do what you love. As far as choosing which franchise to go into, I have one word of advice, one word of advice only. Do your homework. One of the good things about the franchising code, I'm not very impressed with it in general. One of the great things about it is they will give you a franchisor, will give you a list of all the franchisees in the division in the franchise with their contact details. And what you need to do is to ring as many as possible. And I'd say that just as much if you're calling gyms as anybody else. If you ring people, ask them what it's like, would they do it again? Is the support good? Is the income good? And you'll pretty soon get an impression. I am astonished that people will spend, even for a service, not by much. It might only be 20 or $30,000, but they haven't spent a couple of hours doing the most basic homework. And as far as running a successful business is concerned, there is one simple principle. If you have a look at what I started from, which was back in 1982. I was an impoverished ex student, I was $30,000 in debt. I had some crappy old equipment, I had $24 worth of marketing. Anybody's interested in that. This is a free copy of this book for anybody who'd like to see it. Just over at our stand over there. And I didn't know anything about business, but I had two assets. First of them was that I was very, very passionate about customer service. I really have an emotional thing about amazing customers, not letting them down. I was one of the first contractors in Australia to have a brush cutter because it used to bug me that I couldn't get all the edges done neatly with a wheel edger. But the other thing, too, is this. One of the things I've done every day of my working life and even when I'm not working, is I ask myself the question, how can I do it better? Being successful is not a matter of making one grand decision or having some breakthrough or some breakthrough idea. It's looking at what you do every day of your life and saying, how can I improve? If you've got people around you helping you with that, that's fantastic. If not, we just look at ourselves. And I've Seen people in business. One thing I notice again and again, looking at different businesses, that people are very little aware of how poorly they're running their business. I can see cases of it all the time, people who are just failing, but they're not. They're just not looking at what they're doing. They're not talking to their customers. One of the things that I do, which people find very strange, is I give my direct personal phone number and email address to every one of my franchisees, which is close to 5,500, and they're welcome to ring me, contact me, email me anytime. It can be daytime, evenings, weekends. I don't mind. I even had a guy call me on Christmas Day just to wish me Happy Christmas. But I don't mind that. And I find that's really useful because it helps me to understand what's going on. My franchisees are my key customers, and I want to know what's happening and what they're doing, how they're succeeding, why they're failing, how's the system letting them down, how's the franchise all letting them down? What can do. What else can we do? And it's a really key, important part of my job. And I actually still get involved with customer service. If a customer rings the office a second time that hasn't been looked after properly the first time they called, they will pass that to me and I will sit on that job until something happens and it's solved. So that's my principles of success. As the thing says in business, but more particularly in life, I just want to say business is great. Business is fun. I enjoy it. It's like a great, incredibly complex. Who likes computer games? Love computer games. Okay. Business is like a wonderful, big, complicated computer game with endless levels and endless bosses to defeat. And you can always keep on going and they pay you for playing. It doesn't sound a perfect life. So I really love what I do. I'm 72 years old. I don't intend to retire ever. I've probably got another 20 years left because my health is very good. But it's a wonderful thing. But I plead with everybody here. It's not just about. Not just about money. It's about life. Have a life that has a purpose. And most of all, families matter. Families matter more than anything else. And if there's any sort of conflict between business success and our families, please choose family, because that's what a really good life is all about. Are there any questions, anything you'd like to ask me while I'm here.

If you have a question, just raise your hand so that we can get microphone too, so Jenny can hear you.

Yeah. Hi. Really appreciate hearing from you. You answered my first question, which is, will you resign? I think you would. What is the next big milestone that you're after for the work that you do? You know, I never think in terms of milestones. If you ask me what my aim is, my aims will be two first, no franchisee in gyms would ever be unhappy in any way. And secondly, no customer in gyms would ever be happy with. Unhappy with any service provided from us. Now, these are quite impossible aims, but that is my goal. We have never had an aim of profit. We have never had an aim of number of franchisees. We are growing and we're doing well and it's great. And the profit's growing too, but it's never been the. It's never been the major thing. I just like to improve. It's great fun. One of the things we're working on now is a system called Jim's Healthy, which is really healthy food that meets all Australian diets. You can have this food to bits of fruit and you will have six serves of vegetables a day. You will have minimum saturated fat. You'll be able to live to 100. Okay. Like I intend to. That's a really exciting thing because I love that. But that's, that's a business. But it's also about health, it's also about purpose, it's about passion. And quite frankly, if it was successful and we didn't make much money. But I wouldn't mind too much because it's worth doing for its own sake. Okay. Hi, Jim, what's the best way to market your franchise to selling? If you want to be selling franchise throughout Australasia, what do you recommend? Our marketing is nothing complicated in anything we do. The best way to market a franchise for sale is to have really happy franchisees. Because honestly, anybody who's got any sense will do their research. And that's actually how I started. I didn't have any very sophisticated marketing when I began June. Back in 1989, I was up against a competitor which is much bigger. They had 250 franchisees and I didn't have the ability to match their marketing efforts. But what I did have is a list of my franchisees with their contact numbers. This is decades before, excuse me, before the code of conduct came out and I gave it to every prospect and they would. They say to me, why is your business different? What's good about Your business. I say, look, here's some things about it, here's some stuff about it, but talk to my franchisees. Ring them. Ring as many as possible. Go up on the road with one or two of them. See what it's like. Do your research. Honestly, it's the same as customer service. What's the best way to advertise for customers? Give great service to the ones you've got. We're in a fortunate situation because we've got so many divisions now that somebody's used Jim's antenna, had a great experience. They'll ring Jim's Dog Wash or Jim's Mowing or Jim's Cleaning or Jim's Anything else. And that tends to be how it works. But the best marketing is to look after people well, whether it's franchisees or customers. And I wouldn't say we're particularly sophisticated apart from that. I mean, everybody knows Jim's. For heaven's sake, just imagine what he does if you didn't put up your hand. Well, odd. Yeah. Oh, okay. Yep. Balance and what you want to do. Like. So how do you go about finding purpose? I have no problem with purpose because I spent my 20s developing a PhD. I did a PhD in history and came to the conclusion that there were some very big problems with society and the solution to them was in biology, basically genetics, that sort of area. Not being able to get the permission, not being able to get an academic post that would labor. I decided the only way to be able to do that would be to come rich. And in a sense, I felt that's God's purpose for my life, and my other purpose is my family. And now it's my franchisees as well. So in a sense, it's very easy for me to find purpose. How you find purpose is difficult. Are you a man of faith? Could I ask that? That's a great place to start. Now, I don't know whether it's Christian, Jewish, Sikh, Hindu. I don't think it matters an awful lot in terms of satisfaction. But being part of a community of faith is the best place to find purpose in your life. And I see what I do as being driven by God. I see the wealth that I own, and I'm ridiculously wealthy, really, compared with most people. It's a gift. It's a loan from God expects me to be used for his purposes. And I think as we are men and women of faith, that is the. That is the best place to start. We follow the teachings of Jesus very much in gymnasts. The idea from John's gospel where Jesus washed his disciples feet. That's the image of servant leadership that we follow that I personally believe in. Franchisees don't work for me, I work for them, I'm their servant. And just as Jesus washed his disciples, which is a very degrading job in those days, very unusual, so we serve other people. Interesting thing, I did talk about happiness before but in fact people who say their purpose in life is to be happy, usually they're not very happy. They're often alcoholics and so forth. People who have a life of purpose and meaning but they're living something beyond themselves tend to be a lot happier over the long term than those who don't.

Another question in the centre here.

Everyone started from somewhere. What's the best financial advice for the best financial advice? Buy a Jim's franchise businesses. Look, if you've got the temperament for business, business is fun, business is good. Business has no upper limits. You go work for a boss, you'll go as far as they let you go. Now if you're in a multi billion dollar corporation you might get to the CEO but that's pretty unlikely for most of us. Being your own boss is great if you've got the ability. It's tough, it requires a lot of emotional stamina. You're going to find discouraging times. But I would say in some way, if it's possible for you, if you've got that level of toughness, go into business for yourself. It doesn't matter what kind of. And when you're in that business, look every day at what you can do to improve. We divide franchisees into three categories. It's a bit like what I'm talking about. Gold, bronze, lead. Gold franchise is somebody who's constantly looking to say how can I improve? If you actually took to Dan Carl over there too, he's a perfect example of a gold franchisee. This is a guy who's a high school dropout, went to work for McDonald's, bought a franchise knowing franchise well, early 20s wasn't it? Then thinking that was a lot of money. He built it up to the extent he was turning over close to a million dollars a year, had six employees, sold that to his employees. He's now one of our top franchisors. In the next year or so he's going to go to America. This guy's a multimillionaire all right, but he's the kind of guy that looks at what he does all the time, every day and says how can I improve? There's some wonderful videos about down around the place. You can see them. Then you've got your bronze franchisees, the ones that will listen to you. And if you suggest they'll do this, okay, we'll give it a try. You've got to upsell. Okay, we'll do it this way, okay. And they come along and then you should then franchise these. The ones that won't listen. No matter what goes wrong, they're always blaming somebody else. They blame the clients, they blame you. They blame the franchisor, they blame the system, they blame the economy, they, they blame the government. Never their fault, Never. They can change. So if you go to business by yourself and you become a gold business person of whatever category it is, that to me is the way to succeed. I've done it myself. And listen, you look at me and you think this guy must be some sort of superman. Believe me, I am anything but. I have done so many stupid things in my life you wouldn't believe. You look at this book, you'll see some of the examples of the dumb things and the dumb mistakes that I've made over the years. And I have many weaknesses. I'm not a particularly good manager. I'm fairly lazy by nature. I have to kick myself to get things done. I'm not very good with people. I can be very tactless. I can lose my temper. All right, there's about a thousand reasons why I wouldn't succeed. I've actually got more weaknesses than probably great majority of people are here. But. But because I have that relentless drive to do better or endlessly so critical, what could I do? How could I improve? And when I come out of this talk, I'm going to talk to what could I have done better? How could I improve? What would have been a better talk? How could I have answered that question better? Always getting feedback.

Jim, one final question over here on your right.

Thank you. Great presentation. What needs to change in the franchising industry to improve the situation for franchisees and franchisees. Yeah, that's very political. Look, the franchising code has the value, has the value of placing in front of you the details, contact years of franchisees, which is the one good thing it does. The disclosure document, to be honest, is complete rubbish. We actually asked a group of trainees who's read the disclosure document. There's a hundred plus trainees. You know how many had read it? Nobody. It's a good way to hide stuff you don't want anybody to read because you know they'll never read it. It's useless, it's bureaucratic, it's legalistic. Even most, even the, most lawyers don't understand it. All right, what the franchising, what the government should do, and this is what I've said to every single inquiry I've ever had, is they should set up a system where every year an independent agency confidentially surveys every franchisee of every division and made that public. And if you did that, that would do more for the goodwill of the system, more to knock out garbage franchisors. And there are some. I'm not going to name names, I'm not saying anybody here by the way either, but there's some really terrible exploitative systems around the place. People take advantage because they don't actually do their research. The government should do it for them. I've suggested this again and again. We've actually just completed a survey of our independently done of our franchisees by a third party, a polling company. We're about to launch that live on the web. Now we're asking questions like how do you rate your income? Would you do it again? Has business been a success? So all the divisions will be listed there, the bigger ones anyway and the overall gyms group average. And we're doing that because we want to set an example. It's not always in our favour because some franchisees don't report good income, but people have the right to know and if the government will get off their backside and do something useful to help franchisees and without being too political, the Franchising Council of Australia is a rubbish body. I have nothing to do with them. They only work for the interests of franchisors. They are not, do not represent franchisees and they accept people who should not be considered to be respectable. Franchisees don't like to negative note but that's my feelings about it.

What you suggest people should ask people looking to join a franchise.

Do your research. That's the biggest thing I'd say research carefully, ask a lot of questions and that just as much the gyms as anybody else. Go out on the road, spend time in the field doing the job, make sure you want to do it. Find something that you love to do that you enjoy doing and then when you go into it, just work hard to say how can I do it better? And you will be a success. God bless you all.

Directly behind us there and gold standard friend. So if you have any questions.

Okay.