JIM SEEKS $10M PRE-IPO INJECTION

JIM SEEKS $10M PRE-IPO INJECTION

BOOMING franchisor Jim’s Group hopes to raise $10 million in a pre-initial public offering (IPO) and plans to use proceeds to establish business start-up loans for new franchisees.

“From general advice, it would seem that an IPO would be premature at this stage. I’d be interested in a suitable investor or investors, especially if they had appropriate skills or contacts that could help get the business to a stage where an IPO would make sense,” says founder Jim Penman (pictured).

He reveals the group is booming with 3200 franchisees and franchisors in Australia, New Zealand, Canada and the United Kingdom.

“In 2010, we took 414,831 leads, of which 65,457 were unserviced. In 2011, we took 439,335 leads of which 80,817 were unserviced; demand for our services rose 6 per cent while franchisee numbers grew only 4 per cent; unserviced leads rose by 23 per cent,” he says.

“Our problem is that more and more franchisees are getting booked out and unable to take more work. In some areas we’ve completely eliminated advertising, but there’s still too much work coming in.”

Penman predicts the number of franchisees will hit 3600 by 2014, but concedes there would be up to 5000 if prospective franchisees could source finance more easily.

“One of the main reasons for the float is to be able to offer vendor finance to franchisees. There is actually a huge demand for franchises, but we lose hundreds of sales a year because the banks won’t lend the money to new franchisees,” he says.

The group established 20 years ago operates 30 divisions including Jim’s Cleaning, Jim’s Bookkeeping, Jim’s Mowing, Jim’s Pool Care, Jim’s Test & Tag and Jim’s Dog Wash.

It employs more than 6200 people, services up to 100,000 customers a week and has 455 franchisees in Queensland – 210 of which are based in Brisbane.

Penman estimates the company, which generated $450 million in revenue during the 2011 financial year, is worth at least $50 million. However, he predicts his iconic brand will be worth more in years to come.

“Jim’s could be a $1 billion company one day. The only barrier to growth is capital,” he says.

“We see a 30 to 40 per cent return on equity. I have a great business and have a lot of confidence in it.”

He points to an estimated 95 per cent brand-recognition rate.

“How many companies in Australia have listed that have the same brand recognition as Jim’s? We are up there with giants such as McDonalds, but when you compare size we are like a gnat to an elephant,” says Penman.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

SNL’s Pete Davidson to star in QLD feature film ‘Wizards!’

SNL’s Pete Davidson to star in QLD feature film ‘Wizards!’

The Australian screen sector has bagged two major wins today, with ...

Scrap metal recycler Sims picks up Brisbane port site for $88 million

Scrap metal recycler Sims picks up Brisbane port site for $88 million

In order to acquire one of the few remaining Brisbane sites with de...

“No one plans for these things”: Metricon acting CEO denies crisis rumours following founder’s death

“No one plans for these things”: Metricon acting CEO denies crisis rumours following founder’s death

Just days after the sudden and unexpected death of Metricon founder...

How tech rebooted economics and platforms broke the invisible hand

How tech rebooted economics and platforms broke the invisible hand

Growing evidence and new research explain the evolution of economic...