Jim’s Group founder Jim Penman denies franchisees are set to dump him

Jim Penman, founder of the giant franchise chain Jim’s Group, has denied media reports that a majority of franchisees have voted to oust him as leader of the group, claiming that a vote on his leadership has been orchestrated by a disgruntled former master franchiser.

But Penman has vowed to sell his stake in the business if a majority of master franchisers and franchisees want him out.

According a report in The Age, a private ballot of master franchisers has found 89% want him out. The report also suggests a group of franchisers is considering launching a class action against Penman over breach of contract.

Penman questioned the validity of the vote and says it has been organised by Paul Carr, who formerly ran the company’s operations in the United Kingdom.

Penman says Carr is suing him for $1 million in damages, while Penman has launched a counter-claim for libel and damages.

“This is the guy who was turfed out on the basis of an overwhelming request from the franchisees,” Penman says. He claims Carr wants $1 million for his stake in the UK business. Penman says it is worth “a tenth of that”.

Penman says he is not worried the threat of a class action or the apparently overwhelming vote against his leadership.

“I have had about 20 people contact me and they didn’t bother to respond to the vote. I’m pretty convinced the majority of franchisers and franchisors support me.”

Penman admits there is some dissatisfaction among franchisees and franchisers in regards to changes he wants to make to the Jim’s Group franchise manual, but says these will be discussed and voted on at a meeting of Jim’s Group’s franchisee-elected advisory committee. The meeting will be held in three week’s time.

“All manual changes can be voted down. If there is something that they want to change, we’ll change it. We always have.”

However, Penman says that once his legal battle with Carr is sorted out – he says this could take at least a year and maybe two – he is prepared to hold a referendum of all franchisee and franchisers to determine if they still want him to lead the company.

“If the majority and franchisees and franchisors wanted me to sell Jim’s Group then I would sell. I’ve already been offered more money than I can ever spend.”

Penman comfortably survived a similar referendum in 2005.

He says the spat will not become a distraction for the Group, which has annual turnover of around $250 million.

“What I really want to emphasise is that this won’t affect franchise support in any way.”