Jim Penman, founder of the Jim’s Group has rejected recent media reports about the viability of Jim’s Dog Wash business.
Penman and marketing chief Joel Kleber took a full transparency approach to the news stories, which included reference to a previous ACCC fine. The pair addressed the business concerns in the latest edition of Jim’s Podcast. The group also uploaded on the brand’s website Penman’s responses to the news.com.au questions.
Franchise Executives asked Penman to respond to claims that disgruntled franchisees in the dog wash division were not making money or getting the support they expected.
“Our latest survey shows that some 10 per cent of dog wash franchisees report poor income, which is actually less than for most divisions and far less than any of our competitors,” Penman said.
He agreed that poor support can have an effect on business success.
“But in this case not so, because we do better than our competitors and far better than independents,” he said.
Who owns the trailers?
According to news.com.au, unhappy franchisees were concerned with a number of other issues. These included lead fees, split territories, end-of-term costs for transferring mobile phone numbers and the question of trailer ownership.
The Jim’s Group owns and supplies the trailers which franchisees lease. The vehicle is transferred with the sale of the business.
However, news.com.au reports franchisees assumed they would own the trailer at the end of the lease.
In the Jim’s Podcast in response, Penman made it clear the agreements and disclosure document stated the Jim’s business continues to own the trailers.
“We did hear some stories that franchisees were getting misleading ideas. As soon as we found that we actually implemented an extra stage, where we got them to sign a statement that said they clearly understood that we owned the trailer,” he said.
Environmental issues
Penman has also responded to concerns about franchisees breaching waste disposal regulations.
According to news.com.au, the Victorian Environmental Protection Agency found franchisees were disposing of wastewater into gutters.
Penman told Franchise Executives, “We’ve always told franchisees to discharge water onto lawns and gardens, not into the gutter. When the EPA stated we had to discharge into sewage outlets, we told franchisees to do this.”
A Jim’s Group ‘insider’ told news.com.au that changes to the operations manual made in response to the environmental rules had been made without a franchisee vote.
Penman said, “Our contracts clearly state that franchisees must obey the law, so this overrides the need for a vote.”
Dog Wash division now led by Jim’s Group
Jim’s Dog Wash has been brought back from the divisional franchisor and is managed by the Jim’s Group.
“Since taking over the division we have set up a uniform grooming course for any new franchisees, and we are arranging local upskilling courses for existing franchisees. The latter to be paid for by a surplus in the advertising account, as voted by franchisees,” Penman said.
