Ezra McCarthy
Hello and welcome back to lawn care success blueprint, the podcast for lawn and landscape pros who want to scale smarter, grow faster and buy back their time. Today’s guest, what we have with us is an Australian icon and legend in the world of franchising, Jim Penman, the founder of Jim’s Mowing and Jim’s Group, which now has over 5,000, yes, you heard that right, 5,000 franchises across the globe. But Jim didn’t start there. He started with $24, a mower, a PhD in history. You heard that right, history.
And a mission to build something better. In this episode, we’re gonna unpack with Jim how he went from mowing lawns himself to building one of the biggest and most recognizable service brands in the world. And so we’re gonna hop right into it. Jim, thanks for taking time to be here today. Would you take us back to 1982? What made you start mowing lawns with $24 and just a mower?
Jim Penman
Good to be here.
I could take you back even further to that time I was eight years old, which is in about 1960 when I started doing gardening jobs for a neighbour across the back fence. That was 20 cents in those days, two shillings. That was my original. I did it through most of my childhood. And then when I left school in 1970, I took a gap year and I started a small gardening business.
Just put an ad in the local paper. So that goes way back. And also my student years when I did my bachelor’s, my history degree and my PhD, this was my part-time job because it paid pretty well. And I liked being outside and I love gardening and fresh air and just like it, okay? So it was a good break from studies. I could study during the week, go into a day or two, make decent money, fund myself.
Now, I intended to be an academic. I had a research topic which was looking at the reason for the rise and fall of civilizations, which I eventually concluded in that period, 70s, early 80s, was to do with changes in character on a biological basis. So this is a very radical way of approaching history. And my whole expectation was that I was going to be an academic and I was going to teach and I was going to research. And as it came to the end of my PhD,
in 1982 I found there was absolutely no possible way I would ever be able to get a job teaching and doing because I was way out of the line. In history you’re supposed to be an expert in one field. I was trying to look at all of human history, common patterns, ecology, cross-strait geometry, everything. Totally completely out of the question. Now I didn’t give up on my dream. What I wanted to do was to run a research institute which had to be in the area of neuroscience.
And to do that would need a lot of money, millions and millions and millions of dollars. And I am in that stage, 1982, completely broke. Not only broke, I was $35,000 in debt. In those days, you could just buy a house for $35,000. So I was in a terrible financial situation. So that’s the situation I had
when I started deciding, okay, what do I do for a living? There’s only one thing I know how to do and that’s mow lawns for a living. I had an old mower and brush cutter, a trailer, put leaflets around, 24 bucks was leaflets in letterboxes around the neighborhood. To make things even worse, a week or so after I started, we had the worst drought in Melbourne history and every lawn in Melbourne died. And then after that, my mower and my brush cutter completely gave up.
They completely wrecked, they were old and they were wrecked and I had to go and buy a new one. So that’s the start of my business. I just worked hard. I was newly married, which was a good thing for me at that stage. I’d done badly in the past because I wasn’t settled. But now I was married, had a wife who was a student. So I was working very long, I started having kids fairly early because I really, really liked children.
So I just had to work very hard, six days a week, morning until night, and very poor. If you were going down, like we had one night out a week and that was on a Friday night. And we used to walk down to the library, cause that’s free. And we walked back and we’d buy fish and chips, but we were too poor to afford the fish. So we had these things called dimsims and chiko rolls. I don’t think we had them in the States. That’s how poor I was, okay. I was not in a great situation.
I just worked really, really hard. And what actually happened was this, and it was a bit strange. I actually said I completed my PhD, but I didn’t complete it. I was actually, I got knocked back. People just didn’t know how to make it. These people who are historians, they don’t know how to make this wild thing. Somebody actually said this was the magnum opus at the end of a distinguished career. Well, maybe we’d listen to this guy, but who is this? He’s telling everything about history is wrong. So I got knocked back.
And my thesis supervisor said to me, if you resubmit, if you rewrite the methodology system, you should be able to get it. And I said, well, there’s no academic reason for it. I’ve got no academic potential, no future. He said, well, you spent 10 years on this thing. You might as well try. So I thought, okay, I’ll try. So I thought, okay, I’m really, really busy, haven’t got much money, but I thought what I’ll do is package together the lawn mowing clients that I have and sell them as an ongoing concern.
Lawn mowing round. That’s a recognized thing. So I did that and I put a bunch of my customers together and I put an advert in the local paper and I advertised it for sale and I got some people, somebody was interested and there were discussions going on. But the one thing I should say about this is that I was actually a very good lawn mowing contractor. I was very fanatical about customer service. That’s probably pretty important in all this consideration. I really looked after customers well. I was immaculate about doing edges. I always turned up on time. As a result of that,
as I was getting rid of all these customers, putting them into a run, getting them ready for a person to sell them, I kept on building up a customer base. And by the time that there was a guy ready to take over, I was actually still working flat out. So I said this is no good. I’ve got to sell these customers. I can’t mow lawns full time and do my thesis. So I advertised again, got another person in who was interested, took a while, discussions and so forth. And you can guess what happened. By the time I’d actually got to the stage of handing over the business to him, I was still flat out.
So I did it again, third time. I built it up and sold three lawn mowing businesses and I had enough time.
Ezra McCarthy
Were these people under the name Jim’s or did they take their own name?
Jim Penman
We were. There were people who wanted to buy a business. I had no concept of franchising. We were just selling lawn mowing rounds. Got enough time, got rid of my business, had enough time, completed my thesis and that all got rewarded, okay. But I looked at this and I said, well, actually I’m making a lot more money building up and selling lawn mowing rounds than I was trying to make a living out of lawn mowing and employing people and subcontractors and so forth.
In fact, my subcontractors weren’t particularly good. I didn’t know any way of controlling them. I wasn’t doing that very well. Building up and selling rounds, that worked pretty well. So I started the business doing that. And what I did was I developed a system which was very— I looked after people who bought lawn mowing rounds from me very well.
I would replace their customers, anything that dropped out, if any of those dropped out, I replaced them. I gave them advice. I even used to throw you lunches and stuff we didn’t charge for. I just used to look after them well. And what I used to do was…
Every person who bought a lawn mowing round from me, I put their name and their phone number in black texta on a white card and stuck it behind me. And then if anybody was interested in buying a lawn mowing round off me, they would come and I would say to them, well, look— they’d say, who are you to sell lawn mowing rounds? What’s your good faith? I’d say, look behind me on the wall. You’ll see eventually there were up to a hundred names there, people who bought lawn mowing rounds. And they all said Jim was good.
I must say too, one of the things in the beginning when I was doing this, I was very, very bad at selling. I had very poor people skills. I’m very introverted and very socially awkward. So I was really bad at selling. And this was a big problem. I was building up these rounds and I was finding it really difficult to sell them at any scale.
And I actually learned how to sell lawn mowing rounds one day. And I’ve always thought this experience was the foundation of my whole career since then. It happened when I went to see somebody in my church who was in advertising to get some advice, to see if there was an advertising angle to help me get more work more efficiently. This guy was quite successful. He was a millionaire. Very plush office and stuff, doing very, very well. I was quite intimidated. I was just a lawn mowing contractor with a car and everything else. And he invited me into his office and for half an hour, he just told me about the advertising business, how to make a success of it, how to…
How to advertise, what sort of media you could use, what sort of wording. He just told me about advertising. At the end of it, he said to me, Jim, you don’t really need an advertising agency at this stage. You just need to do what I’ve said.
Now, I walked out of his room and I knew that if I ever needed an advertising agency, I would go straight back to him. And as I was walking back to my car, which was parked quite a few streets away, I was thinking about this. Because I was in this problem—how do you sell? And I thought, this guy has completely sold me on his business, but he hasn’t told me anything about his business. I don’t know what he charges, I don’t know about his clients, I know nothing about his business. And yet I know that I would use him.
And I did actually, years later. A few years later when I wanted to do TV advertising, I went straight back to this guy, to Peter.
As I got to the car—you’ve got to understand how bad my car was. It was a crappy old white Holden, which is like a GNH car in Australia. It was battered, it was rusty, the back seat was ripped out to put my rubbish in. People would back into it and I’d say, don’t worry about it, it’s a wreck. It really was a bad car. I never used to lock it.
I can remember reaching out to the handle of this car thinking, okay, I wonder if this same approach could work for selling lawn mowing rounds. So the next time somebody approached me about a lawn mowing business, instead of talking about my business, I said, Tim, tell me, do you know what the cut of a lawn mowing round is? Now a cut is each job done once.
So you’ve got 80 clients, cut of $80, you can work it out. And I knew what it meant, and everybody in the industry knew what it was, and it was in the paper. But people who asked typically didn’t know, so I’d explain that to them. And then I would go on to talk to them about the business—how you advertise, how you’re successful, what equipment. I’d just give them advice.
And then when they came to see me, I’d just keep on telling them about the business. And then I’d say at the end of it, here are some customers in your area.
I had an interesting test of this very shortly after, when somebody who’d been to see me rang me up and said, Jim, I want your advice. I’ve been offered a lawn mowing round in my area and I want you to tell me which is the better business—that one or yours. So he’s asking me for advice on whether to buy my business.
So I thought, okay, I’ve got to do this with some integrity. If I’m really after this guy’s interest, genuinely, I’ll give him advice. So I said to him, okay, how many customers, how far apart are they, what’s the cut, why is the guy leaving, how long has he… Just the normal questions you’d know how to ask to value a business.
And at the end of it, I said, that’s a better business—buy that one.
Got asked the same question three times in a row. Each time, I told them, buy the other business. And each time, they bought from me.
And at that stage, that lesson—that one lesson—was the foundation of everything. Because suddenly the guy who could not sell, could absolutely not sell, became very good at selling.
Franchising. All right, you think—I’m still a subcontractor. No uniforms, no logo, no nothing, no clues. I couldn’t honestly see the value of franchising because I couldn’t see the ongoing value. I could see why you’d want someone to build the business, but why would you keep on paying fees?
So I was trundling along, making a bit of money, got out of debt, bought a house, I was doing all right. And then something really bad happened.
A competitor came from another state—from South Australia. And these guys were organized. They had logos, they had offices, they had systems, operations, and they had 250 franchisees. And they just terrified me. I thought, they’re going to crush me like a bug.
So I actually rang up the state manager and said to him, I’m Jim of Jim’s Mowing. He said, I know who you are. And I said, look, I don’t want to compete with you guys. You’re obviously too successful for me. I’ll just help you. I’ll build up your business and I’ll find customers for you at a good rate. So I’ll help to build up VIP.
And he said, no thanks.
So I thought, all right, okay, let’s have a look at this.
So I went to the local expo—Franchising Expo—that year in 1988. And they used to give you a little badge saying who you were. I took it off, put it in my pocket, walked up to this VIP stand, said, very interested in your business, can you tell me about it?
Didn’t say why. I’m a terrible liar. I wouldn’t have told him if he’d asked me, but he didn’t ask. Fifteen minutes, he explained to me how the VIP system worked and gave me this brochure.
Now, I didn’t even know how a brochure was bound. It was a heat seal binding. I knew nothing about it. But he just gave me this brochure, which was gold to me. And then the state manager came in and kicked me off. He said, that’s Jim Penman. Don’t tell him anything else. So they kicked me off the stand.
But I walked away and I thought, well, you know, I can see benefit to this system. I reckon there’s a reason a person would want to buy a franchise. Because I wouldn’t want to sell a franchise that I don’t believe in. But there’s a reason why a person would buy a franchise and keep on paying fees. But you know what?
I reckon I can do a system that might be better for the franchisee.
Now, so I went to lawyers. And that was a really tough time—nine months basically arguing with lawyers. I had this idea of a franchise and I wanted to build all these concepts into it that were really favorable to the franchisee. I wanted to believe in what I was selling to the best.
For example, I knew that one of the things they did was, when a new franchisee came into an area, they’d take regular clients off an existing person and give them to the new guy. I knew they hated that. So I thought, okay, I’m going to write into the contract: we can’t do that.
I wrote into the contract territory rights. A job comes in from advertising, you must get it as the territory holder. But you are not bound. The only thing you can’t do is knock on someone else’s territory.
I said, you can build your business to any extent that you’d like. You can put on as many employees as you like. Your fees won’t change. We don’t touch a percentage. It was more of a flat rate thing in those days.
So I put all these protections in. When you come to the end of your real term—automatic renewal. As long as you’re compliant, we have to renew. That’s in the contract.
So I put all this stuff into the contract that I thought was the best. And when I had what I thought was the best contract possible, I went to the people that I wanted as founders—some of the best people who had bought lawn mowing rounds from me. And some of the…
And I had to swap it for a franchise, and they could walk out whenever they wanted to. I liked people to walk out too—if they didn’t like the thing, they could walk away.
I also invited some of my best subbies, the really good ones. I offered them a franchise too. Then I gathered these people into a room and gave them the contract. I said, okay, here’s the contract. What do you think?
So these people—my first franchisees—went through the contract and said, don’t like that, don’t like that, change this, put this in. Yeah, okay. So I changed it. I got the best contract with the help of these first prospective franchisees, turned that into a contract, and about half of them signed. That was the start.
Now, I didn’t think it was going to work that well. Somebody asked me at that time, how many franchisees might you have one day? And I said, well, look—bear in mind I was just trying to survive against a competitor that had 250, who were much better organized than me, and had all this stuff I didn’t know how to do. I said, I reckon if it works really well—I’m not sure it’s going to work—but if it works really well, one day I could have as many as 100.
That’s what I said when I started. Somebody in the media asked me. All right, I said maybe, maybe 100.
And the lawyers actually said to me, what if you want to go interstate? I said, this is a lawn mowing business. I’m not going to go interstate.
Now, one reason I didn’t think it was going to work that well or ever grow that big was because I was determined that I wasn’t going to take anybody that I thought might fail. Because I thought that was unethical. I didn’t want to sell a franchise to somebody that I didn’t believe was going to be successful.
So one of the things I arranged was that any prospective franchisee had to go out on the road with one of my top guys. Because I knew that if they did badly on the road— I knew from selling lawn mowing rounds—they’d tend to fail.
I remember one time a guy, one of the trainers, asked me when I was selling lawn mowing rounds. He said, what happened to so-and-so and so-and-so? And I said, they failed after six months—because I used to keep in touch with them.
And he said, I thought so.
And I said, why?
And he said, because they didn’t…
They didn’t show good customer service. So I said, I am not going to put anybody on that I’ve got doubts about. I’m going to have everybody screened—not only by myself, but I’m going to send them out on the road. I get an opinion. If they fail the tryout, they do not get a franchise. And that means if they don’t listen, if they’re shoddy, if they’ve got a bad attitude—anything at all.
So I thought, okay, I’m not going to be really big like VIP, but maybe I’ll just survive and they won’t crush me totally.
And so I started off with very limited expectations. And it started to be quite successful.
And I realized I had a golden weapon—something that I hadn’t quite understood was important. And it was based on the idea from when I used to put the names and phone numbers on bits of card. What I used to do—because it changed so rapidly now—I used to put them on a list. I’d have a list with names and phone numbers of all my franchisees.
Nobody did that in those days. VIP didn’t do it.
When somebody came to see me and they thought, okay, I’m talking to a guy who’s running it from his basement, the other guys are interstate, they’re much bigger, they’ve got a fancy office—why would I buy from you? You’re just starting up.
And I would say, okay, there’s some differences between the systems. I wouldn’t bag them, I’d just say, there’s differences, this is how we operate. But here’s a list of my franchisees with their names and phone numbers. Take it away. Ring all of them. Just ring them up. And then go to VIP and ask them.
That list. That list was the one that worked.
So the decisions that I made about not taking on people I wasn’t sure of meant that they— and I also gave them support, and I talked to them, and did everything I could to help them, just in the same way as before, but now they’re paying me fees. I really, really, really looked after them well. I cared about them a great deal, and I would give them any help I could. I would do everything possible.
I had the lowest fees I could possibly get away with. I just really, really tried hard to look after them.
And it just started to grow, and it was really quite amazing. By the end of the first year, I had 60 franchisees, which was way beyond my expectations. People were starting to come from interstate.
So this is crazy. This is a lawn mowing business, but they’re actually approaching me. I’d go to the stand at the franchise expo and people would be three deep across the stand. It was just me by myself, and I would go hoarse from talking all the time. It was starting to work.
And it just grew. It just kind of shocked me. It really did.
But from the start, I developed a little three-part thing. You’ve seen it on the email I sent you. Right at the bottom of my email, you see: our first priority is the welfare of franchisees. We are also passionate about customer service. Passionate—it’s an emotional thing. We sign only franchisees and franchisors we are convinced will succeed.
And that little three-part thing became the absolute core of what I believed in.
And the whole notion behind it is that you put franchisees first. And that’s even ahead of customers.
Now we insist on great customer service—and I can talk more about that later if you like, how we do that—but the fact of the matter is, we’re asking for great customer service because I want my franchisees to be successful.
That’s the key idea behind everything we do. Why I have franchisees—five and a half thousand—who have my phone number and email address.
Call me anytime—weekends, Christmas Day. Somebody’s having a Christmas Day, just gives me a happy Christmas. But they can do that. Why? Because I want to know what’s going on. I want to be able to help. Multiple franchisees every day contact me, and I will give them every bit of advice I can. Sometimes it means changing the system, so I know what’s going on.
What’s failing you? What’s not doing well? What franchisors aren’t helping you? Who’s not returning phone calls?
And then we survey our franchisees every year—anonymously, confidentially—and ask them questions about service, how often they’re called, all this kind of stuff. Meetings. How they rate their income. Confidential.
If a franchisor doesn’t know what the answers are, well, we use those surveys to reward good support and to penalize poor support. Put pressure on for better support.
So focus—service to franchisees.
I suppose if you look at my inspiration, it’s something like from John’s Gospel. Jesus washes the disciples’ feet. That’s the idea: servant leadership. We serve. I’m not the boss. I provide a service for you. I work for you—you, my franchisee.
And that’s a very emotional way of looking at things. It’s like my family in a way. They really are. I know there’s five and a half thousand, but that’s how I feel about them—a sense of purpose.
You know, the lawyers said to me when I set the system up, they said, you’re going to want to modify this. Nobody runs a franchise giving franchisees so many rights. You’re going to want to take power back.
You know what I did? I gave them extra power.
Because I started putting on regional franchisors after a while to give better local service. But I put in clauses in the contract that said things like: you can change to a different franchisor if you’re not happy. The other franchisor has to accept you. There’s often more than one in the same city.
But your own franchisor has no say, which means if you don’t look after your franchisees, they can go somewhere else—in these days, even to a different division.
Not only that, but you can vote out your own franchisor. Simple majority, confidential vote. You can vote out your franchisor. If your franchisor can’t win your confidence back within three months, they have to sell.
You can veto changes to your own manual. That only came in about three years ago—we put that in.
And finally, just last year, I set up a system whereby in the contract—because I’m concerned, I’m 72, I’ll probably live another 20 years, I’m in very good health—but I’m concerned about what happens when I’m no longer around to protect my franchisees.
I don’t want somebody to come in and grab the company and just rip my franchisees off, which you can do. So I put a clause in the contract that said the majority—the controlling interest—in Jim’s Group cannot be sold without the consent of a majority of franchisees in writing.
Not only that, but there’s a board set up in which franchisees are going to vote to put a director on the board.
So I’ve done everything possible to protect them even when I’m no longer around.
Ezra McCarthy
That’s so interesting, Jim. I think you’ve clearly demonstrated why it’s grown so much. Obviously, you’re passionate about helping them. And as you’ve scaled at this point past over 5,000 franchises, what would you say has been one of the hardest lessons you’ve learned, especially at this point—you’ve got so many franchisors really looking to you for leadership.
Jim Penman
The hardest—my hardest problem is finding good people at head office.
I have got some. Obviously, we always want to try and find the best franchisors—usually the successful franchisees that come up through the ranks. We call this the millionaire factory actually. We reckon we’ve created more millionaires than any company in the history of Australia—or New Zealand, for that matter.
So that’s worked quite well. Obviously, we want people who are passionate.
If people ask me if I’m proud of having five and a half thousand franchisees, I say, well, the thing I’m most proud about is that, in general, most of my franchisors actually really care about franchisees. It’s the culture thing in Jim’s—they really do.
During COVID, when they couldn’t work, we didn’t charge any fees. But the franchisors were working harder than normal just to counsel their franchisees. They’re kind of like a gardener, a bit soft, I must say. They have that kind of attitude.
The hardest part I’ve found is finding people in head office. Finding head office staff—especially leaders, managers in my head office. I employ directly about—count the call center—close to a hundred people. And that’s…
Ezra McCarthy
So how do you maintain quality and consistency? That’s something that you’ve really emphasized—across, at this point, not only different divisions, you’ve got different services, not just mowing, then you’ve got different countries.
Jim Penman
Well, services don’t make much difference actually. Whether you’re cleaning or mowing or pest control, they’re all very similar. They’re all service businesses. We don’t do fast food restaurants or anything—it’s all service.
We have a system of operation that drives quality.
First of all, we do selection. That’s a core value. A franchisor who’s found not to select properly is in big trouble.
Secondly, we have a training system. We have three days of generic training plus your divisional training. Now the first session in generic franchise training…
Is me. I talk for an hour and a half. It’s about customer service, service to franchisees. And we know that’s effective because there was a time during COVID when we couldn’t actually train them in the proper way. We used to give them videos and stuff, and some of them didn’t watch that. And I know that—because their customer service was terrible.
So that session is big.
Then we have a survey system. We are very highly automated. We spend several million dollars a year on automation. So we have a survey system.
Ten days after a lead goes out, we send a survey to the customer—very simple SMS—and ask them for a letter: G, good; B, bad; P, too pricey; S, stop. That’s real simple. They can do that.
And then we ask them for information. About 30% of our clients respond to that. And we feed that back in.
If you get a good rating, that’s a very prestigious thing. If it’s a bad rating, it’s a poor one. If you get a problem with a survey or the customer rings in to complain, it’s an official complaint. And that’s handled by the franchisor.
The franchisor can then appeal the complaint and say, look, the customer said they never called, but here’s the evidence—they called and texted the client within two hours. Or they did make a mistake, but in the end, the client’s satisfied. So we knock it off. We knock off the complaint or the bad survey.
So it’s a system of complaints and surveys. I’m the only person that can delete a complaint. And customers also can speak to me if they’re not satisfied with how the first complaint was handled.
So I’m very personally, daily involved with the complaint system.
A majority of franchisees do pretty well. Their average rating is about 4.7 or 4.8 out of 5. They’re very good—allowing for the fact that you can get rid of poor complaints.
Franchisees who get too many complaints—and there’s a certain percentage, like four complaints, 4% of total leads within six months—they get a warning letter. If they mend their game, no problem. Usually, they do.
But if they continue to get serious complaints, we send them a breach notice. And that’s really serious. They don’t get any leads until they’ve actually spent…
They’ve done a retraining course, which is run every Wednesday online. And after that, they’re on breach.
Every complaint then gets sent to me. If the complaints continue, they’re denied further work or they’re terminated.
Ezra McCarthy
You there—you literally personally view these complaints?
Jim Penman
I don’t view every complaint, but I view any one that they try to get deleted. I personally read the surveys.
Since we’ve been doing this, the level of complaints has dropped. To give you some idea of what that means—when we had the pre-franchise days, my service was pretty bad. I have to admit it was. My own service was good. Many of my subbies—no.
So for every 100 leads, we used to get about 100 complaints. It was bad. Mostly not turning up on time—because these are regular clients. Okay, bad.
Sometime into the system, we started measuring complaints systematically. And I found we were getting about 5%. So for every 100 leads, we were getting five complaints. And bear in mind, you can get a job now, and it can be done for a year—and then you get a complaint. So it’s not as bad as five people calling back, but eventually we got five complaints.
And then we started putting these systems into place—complaints and surveys. And as we did that, the level of complaints dropped, and dropped, and dropped.
Now our level of complaint, for the number of leads, is a fraction of 1%. So we’ve seen a more than 99% reduction in complaint levels.
And we have a new system being developed for our franchisees—we call it Jimbo or Jim’s Jobs—that I confidently believe in the next three months will at least halve the level of complaints. Because they’re putting a whole lot of things back.
We’ve got a system that means they have to ring the client within two hours. If they don’t do that, then…
They don’t do something about it—first of all, my voice comes on the app: ring the client, ring the client, ring the client. If they don’t ring, that message comes back to head office and we freeze their leads until they explain why they didn’t call.
And we’re putting other systems in place—like we’re confirming if they don’t turn up. We’re putting in an automated system so that if you send an email, a lead is supported by a text. If you can’t get through to a client, it texts them.
There’s a whole stack of stuff going into this system we’re developing that I believe is going to drop the complaints by at least 50%. Because I’m involved in this so much, I know where these complaints happen. I know how to get around them—because of my everyday involvement.
And it’s an interesting thing that’s happened with this. As we’ve done this—and to a quite remarkable extent—as the level of complaints has dropped, the volume of leads has risen. Has risen dramatically.
Just for example, in the early days of the business, we used to have teams of canvassers knocking on doors to find work. In recent years, we haven’t had to do that.
And something strange has happened too. Our level of unserviced leads has risen dramatically. We’re actually spending less money per franchisee on advertising than we used to. And this level—we’ve got, last year we had like a quarter of a million unserviced leads. Something like 20–25% of our leads are unserviced these days.
And we’ve cut back on the advertising. We even get to the stage where, in every contract, there’s a certain amount that has to be spent—like $150 per month.
On advertising—we’ve got to the stage where we can’t spend it, because they’re so busy in some divisions, in some areas. So we have to work out how to give it back to them, because you can’t hold it.
So for example, Dog Wash people got a free conference last year—all paid for by the advertising budget. And we’ve now put down that advertising contribution, because they don’t need to pay so much.
So it’s quite extraordinary. And even though I believe in customer service as a way of keeping my franchisees busy, it’s quite staggering how, as our service has improved, the volume of leads has risen and risen.
Because of reputation—obviously people use one service, and it helps to have 40-plus different divisions. They use one service, they get a great experience, and then they reach for something else.
Ezra McCarthy
See, there’s a lot of brand trust there—that people are wanting to come back. One thing you said really stuck out to me. You mentioned that your franchisees can call you—all 5,000. I think you said they all have your phone number. How are you not just overwhelmed with calls and emails?
Jim Penman
I don’t get that many. I’ll probably get about half a dozen a day—something. This is outside normal complaints and things—just people asking for advice.
After one month, I send a message out to my franchisees. And in training, I hit them again and again. Answer me. You’re going to answer me, aren’t you? I really push it again and again. I try and greet everybody personally so they know me.
So most of them respond to that. Now, most of them write back and say they’re doing well. But if they’re not, I look at what’s going on, and I might give them advice. I might show them other divisional services. I might look at what they’re doing—how they’re putting down for work.
Which the franchisor should do too, but I do extra. Sometimes I might talk to the franchisor and get them to put out more advertising. Or directly—one of ours—I’ll arrange for that.
We have a thing called the “pay for work guarantee.” If they don’t make a certain amount of money, which is usually between about $1,000 and $2,500 a week, we pay them to do free services or promotional activities. That’s how they get started.
So I try and encourage them to do that. And I show them videos about how to do these things. So I get involved. It’s just a sort of a coaching thing.
But you’re talking about…
Not a lot—maybe a half dozen a day—they have some sort of issue with something. Sometimes they get problems with fees and stuff, and they want me to help out. Sometimes I do. Sometimes I can’t.
Ezra McCarthy
So Jim, you must still love this. If you’re still wanting to take six-plus calls a day—how do you stay passionate? You can hear it now. I don’t know how old you are, but you’re still passionate. You can hear it in your voice when you talk about these people you’re serving. How have you stayed engaged—even? I’m sure at this point, you don’t need the money.
Jim Penman
No, I’m quite glad. I’m currently spending about $3 million on my research project—it’s the aim of the whole thing. So I am actually funding the research that was my dream in the beginning. And actually, I hope to be able to increase that dramatically over the next year or so.
No, I love what I do. It’s great fun.
To me, life is about purpose. I have a reason for living, a reason for getting up in the morning. My purpose is threefold. It’s my family—I’ve got 10 children, and I love them dearly, and a crazy number of grandchildren. And my wife. My daughter too.
I’ve got my research project, which I really believe will change the world for the better.
And I’ve got my extended family—my franchisees.
And that’s—it’s a business for living. And I think this is a mission that God’s—these are missions that God has given me. And it’s a responsibility. I love what I do. It’s the best job in the world. Really, really—you couldn’t have a more fun, meaningful job than I do, because I’m helping people every day.
Look, I can do things that are just— you see, one great thing about my business is I totally control it. I haven’t got any shareholders.
I’ll give you an example. Just yesterday, I was looking at my fencing franchise…
We’ve got about 120 of them, and I was discussing it with the manager, and I said, I reckon our fees are too high. So I just wrote an email to all my fencing franchisees telling them, your fees are going to be reduced.
So we’ve taken about $300 off the fencing per month for the fencing franchisees. And yesterday, I went right through and did it manually and changed them all. That was just my yesterday job. I just thought it was fair. I just think they were paying too much.
And I dropped them to more like the level of the mowing guys. I didn’t even know how they got to be charged so much, but I just didn’t think it was fair or reasonable.
One of our team—Ray—said, you’re losing a lot of money on this. And I said, well, you know, I just think it’s the right thing to do. So I did it.
Now, I can do that because I’m in charge. Nobody can object.
When I made that change to the contract—the one that said you have to get support in writing from a majority of franchisees to sell a majority share in Jim’s Group—my CFO said, you’re going to dramatically cut the value of your business.
And I said, good. I don’t want anybody else to sell it too.
Ezra McCarthy
Looking back 20, 30 years—well, I guess at this point even farther—you mentioned your car when you went to that lawyer. Just sounds like a piece of junk. And it was at that point. How has your definition of success—from when you first started broke, just trying to make ends meet with your PhD paper—to now, obviously, a lot different?
Jim Penman
Well, my definition of success isn’t monetary.
I was interviewed just a couple of weeks back by—have you got Forbes in America? That’s a wealth magazine. And the guy came to see me, and I said, look, I don’t mind talking to you, but I’m really not particularly wealthy, for a start, because our fees aren’t that high. But at the same time, if you ask me what my goals are, I wouldn’t even put getting wealthy in my top 10.
So I said, I’m not quite sure—why are you interviewing me for a magazine that’s about wealth? That was my comment to him. And he said, well, this is sort of the nonprofit or charitable side. That was his explanation for being able to talk to me.
We’ve got BRW—Business Review Weekly—that puts out the rich 250. And they tried to interview me for that and I said, don’t be ridiculous, I’m not even close to that level. It’s not my aim.
Look, if you ask me my aim—okay, let me tell you my aim.
I’m successful if every single franchisee in Jim’s Group—every single franchisee—is completely happy with their income and their support. Okay?
Secondary—that’s the most important one. Secondly, every client that contacts us is completely happy with the service they get. That’s my definition of success.
Nothing to do with money. It’s to do with service.
We’ve got this thing in the sky here—you’ve got the Pole Star in the Northern Hemisphere. We’ve got the Southern Cross. And the Southern Cross points to the South Celestial Pole.
All right? You don’t expect to reach that, but it shows you the direction you’re going in.
That’s the way I look upon it.
Ezra McCarthy
That’s so good.
So can you look back and see some maybe large mistakes you made as you were scaling or growing? And then how did you learn from that? And how did it shape you as you’ve grown?
Jim Penman
The biggest mistake I’ve made—and I have to say I’ve made it multiple times—is going into different kinds of businesses that I don’t really understand.
Like for example, trade exchange. At one stage, we set up a registered trading organization. Set up a factory to make fiberglass trailers. Tried to get a holiday resort going at one stage. I’ve done a whole lot of things in areas I don’t understand.
So what I’ve found is: stick to your knitting.
Now, it seems like we do everything—mowing, cleaning, all the rest of it—but they’re all very, very similar. So when I’ve stuck to that, I tend to do well. When I do other things, I don’t tend to do very well at all. That’s my biggest mistake.
And the other ongoing mistake, as I said, is I find it very difficult to find the right kind of office staff—people. Finding the right people is the hardest thing in any business, in my experience. And I make terrible mistakes. I just have.
Ezra McCarthy
So if someone got on the call with you and they said, hey, I’m doing 150, maybe 350, and they’re looking to grow their business—and they just said, hey, we’re stuck—how would you counsel them and tell them, hey, this is the next step you should take?
Jim Penman
I’d say, there’s two things.
First of all, you’ve got to have an attitude that says every day: how can I do this better? The difference to me between the good operators and the poor ones—and we have the experience. We have franchisees who turn over millions of dollars a year—multi-millionaires now because of what they’re doing—and we have people who fail.
If you look at the difference between them, the major difference is: the people who are good are looking every day and saying, how can I do this better?
When I was mowing lawns, I was always thinking: how can I save a step to empty my grass bag? How can I get around a tree in a fraction of a second? How can I navigate between jobs more quickly? How can I do a better job? How can I make this immaculate in every way? How can I amaze and delight my client?
Never, ever stop thinking. I was obsessively thinking about it all the time. How can I advertise better? How can I be more effective?
So that’s a constant attitude—day after day after day. And every day of my life, I ask myself the same question: how can I do better? And I’m very tough on looking at what I’ve done wrong and saying, okay, mistake—don’t do that again. Learn from it.
So that’s the crucial stage—that.
And secondly, in my view—and I’m not saying everybody agrees with this—but in my experience and the people I know, people who are successful tend to have a passion for service. It’s not rational. It’s not saying, I’ll give better service so I can make more money, or so I can do this.
It’s: I’m going to give better service because that is the nature of who I am—because that is what emotionally drives me.
I get upset about clients not being looked after. I get really upset when my franchisees fail. It really gets to me. It’s the worst thing. I never, ever get used to it.
So if you’re passionate about the people you’re dealing with—and you’re constantly trying to improve…
…do it better.
As long as you show some reasonable care for the bottom line, you just tend to get better, and better, and better.
Like, if you’re a lawn mowing contractor, what have you got? You’ve got your clients. How can you amaze your clients? What can you do for them that’ll make them absolutely raving fans—people who are going to tell everybody about you?
And I might say with clients—one thing—we have a very tough-minded attitude. We want to amaze our clients with service, but I constantly tell my franchisees, quote: “Hey, don’t be cheap.”
We’re not “cheap as chips.” There’s a company around here called Cheap As Chips. Don’t be like that. We are better than the opposition.
I want you to charge for it. I want you to make at least $70 an hour. At least. That’s your aim. We want to help you do that. Now, ideally, a lot more—but that should be your minimum.
So—great service to customers. Amaze customers with great service. But charge high prices.
Because when you’re talking about people who work for you—it’s also your staff. In my case, franchisees, but staff otherwise.
How can I look after them better? What can I offer my staff? How can I be a better boss? How can I be a better franchisor? What more can I do for them? How can they make the best money? How can they have the best lifestyle? How can they be respected and treated as if they’re important and valuable?
And if you constantly have that attitude—of trying to serve everybody better—but bearing in mind, like for me, franchisees are my top priority… therefore, the money is. My customers might like to pay less…
But my primary goal is to make my franchisees successful.
But if you service those groups particularly well, then you’ll be successful. I also believe you service your suppliers too.
We actually have a clause in the contract—in the manual—that was recommended by franchisees: a franchisee can be breached if they fail to pay a supplier. Because if you don’t look after your suppliers, they’re not going to look after you.
There’s this noxious trend in business thinking, which has to do with the Chicago school—people like Milton Friedman—that says the only people you’ve got to look after are your shareholders. Which, in this case, is just me, of course. Most businesses, it’s the owner.
No, I think that’s completely wrong.
Your stakeholders are—yes—the people who own the business, but also the workers, your customers, your suppliers. They’re all stakeholders. You’ve got to look after all of them.
To me, a good business considers everybody, not just yourself. People can be greedy and they can be selfish. And I see so much of that—very short-term thinking.
Good, long-term decisions—make long-term decisions.
Most of the best decisions I ever made were decisions that I thought were against my own self-interest. Like when I told people to go and buy other businesses. When I made sure that I’d screen anybody who couldn’t pass my… These were decisions made for moral reasons.
I cared about the people I was dealing with—not for logical reasons.
But you look back and you say, wow, that was a great decision. That happens again and again.
You make decisions for moral reasons—and they actually tend to be great business decisions.
That’s not the motivation.
Ezra McCarthy
So looking back, what choices or what would you say you’re the most proud of as you look back over the years?
Jim Penman
I’m proud of the fact that my franchisees—and my franchisors—share my values to a large extent.
We had a guy called Brian Duckett who came to one of our franchisor conferences in Queensland. He’d been involved in dozens of franchising businesses over decades. This guy’s highly experienced. And he came and he talked to my people, and he said, I’ve never seen anything like it. The genuine concern for franchisees. Your culture is entirely different.
That’s what makes me proud.
And it goes a long way too. It’s not just the franchisors. You tend to find in Jim’s—I don’t know about other systems—but I hear so many stories where the franchisees look after each other.
You’ll get a new guy who starts, and people will help them. And somebody who’s like a trainer—an unpaid trainer—will spend half an hour coaching somebody in the evening. They’ll just help each other out.
We had dreadful lockdowns in the state of Victoria during…
…during COVID—and we weren’t allowed to work for two months. It was insane. And I made a big fuss. I was really angry and I took on the Premier. We made a huge fuss about it and got a lot of publicity too.
But the fact that my franchisors were still providing service during COVID—even when they weren’t being paid—working harder… That made me proud.
But not only that—my franchisees were helping each other. We had one girl who was in Dog Wash, and she was a student. She had no government support. She was forbidden to do her job. She was threatened. She had no money to buy food and she was threatened with eviction.
Other franchisees—even though they didn’t have income themselves—were helping her out.
We actually lent her some money and told her, you can come and stay at the conference center if you get evicted.
She got through it, okay? And last time I heard, she was making $5,000 a week. She was doing very well.
But that was a bad time.
And I know people would ring me up and say, look, I’ve got no work, but I’m in a good situation. Is there anybody I can help?
That kind of thing makes me very proud—more proud than anything to do with money, I can tell you.
We had a case—the worst thing that ever happened in the whole history of Jim’s Group—was in Western Australia. One of our franchisees… something happened to him. He killed his three little girls and his wife. Also his mother-in-law the next day.
Everybody was so upset.
I flew over to Perth and held a meeting. And you’ve got to keep in mind—most of the franchisees in the state didn’t know each other. But most of them came to this meeting. It was held in a golf club.
And I talked to them. I said, what can we do? What can we do to stop this sort of thing—to reduce the chance of something like this happening again?
What could we possibly do?
And they came up with all kinds of suggestions. They said every franchisee should get a list of help numbers—suicide watch, that kind of stuff.
And so we did.
We still do that.
We noticed that every franchisor should be trained—formally trained—on how to look after people who’ve got mental health issues. We do that now. I’ve done it myself. Everybody does it.
We also set up a free psychological support service so every franchisee who’s got any kind of problems can ring qualified psychologists. We don’t know who they are or what they’re talking about, but the feedback is that they’re really good. That service is completely free—it’s paid for by the company.
And we really, really push things like meetings, getting together, counseling, calls—stuff like that.
But one of the interesting things they came up with was—what about if franchisees were to act as mentors, without pay, just to help people?
That idea came out of this meeting.
And I said, well, that’s a great idea, but that’s an awfully big ask—people who aren’t paid, doing something as difficult as helping franchisees. I said, just as a thought, I said, would anybody here be willing to volunteer for that?
You know what? Most of the people in the room put up their hand. Most of them.
I was really moved.
It was terrible what happened. Even today, I find it very hard to cope with. But my people were wonderful. They were magnificent.
And I think there’s something in our culture that does that—because when you look after people from the top, it starts with me. It has to start from myself. The way I talk in training, the way I go and greet everybody, and I talk to them about why they matter.
And then franchisees always get that. And they treat their people that way. And that spreads.
So you’ve got this cultural thing in Jim’s—we care about each other.
That’s what I’m most proud of. Much, much more than the money.
The money’s great. But personally—amazingly simple. I’m always buying cheap stuff. My wife always complains. I go to the bottom rack in the supermarket and get the cheap stuff. I turn the lights off in the house. I’m very, very scungy in a personal sense.
But I don’t really care about that kind of stuff. I wear my clothes until they fall apart. She always complains because she keeps buying the new stuff and throwing things out.
But I just don’t care.
Jim Penman
Yeah. I am so totally blessed. I think I’m as happy as any man on Earth. I’ve got the most wonderful wife.
Ezra McCarthy
What would you say—what legacy do you hope the Jim’s brand, the Jim’s Group, leaves behind?
Jim Penman
Service. And I hope it will outlive me.
I’ll probably live another 20 years based on my very good health. But I want it to outlive me. I want this culture of service to keep on.
Look—frankly, we’ll probably keep on growing. I expect to grow. We’re actually looking at launching in the States later this year or next year—in Florida, most likely. That’s kind of interesting and exciting, so that may happen.
We keep on launching new divisions, so I think those things will go on. But the main thing I’d like to do is improve what we do.
One of the most exciting things right now is the software. We’re developing software that can really help franchisees be successful.
Like, for example, one of the things we’ve got in mind: when a client rings or books online, our software will let the system look into the franchisee’s diary and work out where they are—then offer the client an appointment. They could be told: John will be there between 2 and 4 this afternoon. Does that suit you?
Because the problem is—we ring people back, but you lose them. You can’t get through. So we reckon if we can book the job directly, we can improve the conversion rate. And it saves time for the franchisees.
Also, for example, one of the problems we have is franchisees get very busy. They get an established run, and then they stay static and don’t take new jobs because they’re so busy.
We’re setting up a system so they can sell the rights to outlying jobs and take more work within their territory. So not only can they defray their fees, but they can actually travel less and earn more over time.
If you’ve got multiple jobs in the same street, it’s highly lucrative.
There’s all kinds of stuff we’re doing to improve things. That’s very exciting.
If I can work out a way to improve my franchisees’ income using technology—we currently spend several million dollars a year on software development—that’s going to continue.
That’s the best way to lift what we do. I just want to get better.
Ezra McCarthy
If you were to give advice to your 30-year-old self, what would that be? Or maybe a 30-year-old listening in?
Jim Penman
Well, in those days—even at the beginning—I didn’t understand the value of home services.
People get excited about things like high-tech companies, and these days that’s particularly the case. Or retail, and all these other things.
I reckon services is a fantastic business. And I didn’t really understand the potential.
I mean, who would have thought you’d be making millions from lawn mowing and stuff like that? It just doesn’t fit with the way most people think. I didn’t think about it.
Even after the franchise started, I didn’t have much vision for what I could achieve. I knew I wanted to deliver great service, but I still thought I was just doing this until something real came along that I could make money out of.
So I’d say: home services—fantastic area. Go into that. Focus on it.
One of the great things about it, Ezra, is that if you go into something like fast food retailing, you’re either part of a big franchise chain, or competing with someone like McDonald’s. That’s really hard. Because they are so good at what they do.
Same thing in high tech—you’ve got these ferociously successful competitors.
But the service industry? It’s wide open.
Because, frankly, the level of service most people get is terrible. And customers recognize that.
So if you go back and give decent service—there’s no upper limit. It’s great.
And what we find is that we get people who come from corporate backgrounds. They’ve had prestigious jobs, suits and ties and titles. And then they come in and start mowing lawns or cleaning—and they say: this is so much better.
I make more money. I have a great lifestyle. I spend time with my kids.
So the first thing I’d say is: your lawn mowing business has more potential than you could ever imagine. Do that. Focus on that. Don’t get pulled away by all this other stuff.
And then—technology too. The big mistake I made in the beginning: I should have invested more in technology earlier.
It’s been a struggle, because I’m a lawn mowing contractor. I’m not a tech guru. I can’t program or anything, so I have to find people. And that’s always hard.
Ezra McCarthy
Well, this has been great, Jim. Thank you so much for taking time. Before we go—if someone wanted to connect with you, learn more about Jim’s Group or anything that you’re doing—where’s the best place for them to find you?
Jim Penman
www.jimpenman.com.au, I think—or just email me: jim@jims.net. Very simple: jim@jims.net.
Ezra McCarthy
Thanks so much, Jim. This has been great.
Well, that’s a wrap on today’s episode with Jim Penman. Jim didn’t build his empire overnight—it started with great service, a clear vision, and a relentless focus on systems and people.
If you got value from this episode, be sure to share it with another business owner. You could hear Jim’s passion—it sure inspired me.
And if you’re serious about growing your business, be sure to tune into the next one. We’ll catch you next time.
