Australia’s largest franchising company in hot water: Are franchisees getting the short leash?
- Replies 11
In a startling turn of events, a series of leaked emails have cast a shadow over one of Australia's most recognised franchise chains.
The controversy has escalated to the point that the company is now offering refunds amid allegations that franchisees were deceived.
This situation has left many Australians in distress and has led to questions about the integrity of the franchising giant.
Explosive leaked emails from a prominent chain reveal that some customers were ‘misled’, prompting refund offers.
Many Australians reported being in a ‘great deal of distress’, claiming they lost thousands of dollars in the ensuing dispute.
Frustrated franchisees of Jim’s Dog Wash, who paid $49,000 to purchase a franchise including $25,000 for the trailer, found out they would never own the trailer after a contract change in 2021.
Jim’s Dog Wash is part of the larger Jim’s Group, renowned for its lawn mowing division.
With over 5000 franchisees across 52 divisions and a turnover of around $500 million, Jim’s Group is Australia’s largest franchising company.
Founder Jim Penman initially insisted that franchisees who signed after the contract change were aware of and accepted the new terms, which stated the group would own the trailers, as he was unwilling to ‘gift’ millions of dollars.
However, according to leaked emails, Jim’s Group has reversed its stance following growing backlash from franchisees.
On September 19, franchisees received an email from Jim’s Group with the subject line: ‘Refunds for mislead [sic] franchisees’.
The email attributed the issue to a former member of Jim’s Dog Wash division, stating it was evident they had ‘lied to prospects about the trailers becoming theirs’. Jim’s Group also claimed this individual misled them.
‘To the extent that we have been paying upkeep and repairs for trailers that based on the person’s promises, were not to be ours,’ the email read.
Several offers have been extended to franchisees in the ‘interest of fairness’, including transferring trailer ownership to enable them to operate independently of Jim’s Dog Wash.
However, this offer requires paying outstanding fees, including vendor finance, reimbursing trailer maintenance costs to date as Jim’s Group ‘covered this on the basis we thought we owned the trailer as we were mislead [sic] also’, paying a $5000 restraint of trade fee, and removing all signage from the vehicle.
The email stated that franchisees who choose to stay with Jim’s Group would benefit from six months of no fees, no commission on resale, continued trailer ownership, and coverage of insurance, registration, servicing, and maintenance for general wear and tear.
Alternatively, franchisees who opt to stay but want to own their $25,000 trailer would need to reimburse trailer maintenance costs to date, pay the $5000 restraint of trade fee, and agree to cover future expenses, including insurance, registration, servicing, and maintenance due to general wear and tear.
The email concluded, ‘If a franchisee can produce evidence that they were provided with the incorrect franchise agreement, without special conditions, we will assign the trailer ownership to them,’ subject to the stated conditions.
However, Evonne*, who bought a Jim’s Dog Wash franchise on the East Coast three years ago, expressed scepticism regarding the emails from the group.
‘Every email that has been sent to Jim asking for their trailer to be transferred to them so far, he’s rejected so I don’t believe a word of what Jim’s Group says to be honest,’ she shared.
She suggested that the emails were ‘very likely a response’ to articles from news.com.au and an upcoming feature on The Project, intended to ‘try to save face for the brand’.
She also stated that the former business associate is ‘absolutely the scapegoat’ who has been thrown ‘under the bus’, adding, ‘Otherwise, they are liable for a lot of money.’
‘We’re likely going to send a counter-proposal with adjusted terms because no one agrees with paying additional for a trailer we were already lied to about.’
‘The email is also only addressed to current franchisees and doesn’t address what they plan to do for the franchisees under these contracts that have already left, if at all,’ Evonne added.
Meanwhile, Jason*, who has owned a Jim’s Dog Wash for the past 18 months, stated that the situation was a ‘hell of a lot better’ than not owning the trailer, making it worthwhile for him to stay.
Nevertheless, he believes Jim’s Group was compelled to make this decision.
‘They realised so many people were getting together and they were going to have a class-action suit against them, so they are taking their losses,’ he speculated.
‘It’s them covering themselves, but it's still a hell of a lot better for me…considering the fight I was possibly going to be going through.’
However, he also disagreed with the proposed fees that needed to be paid to Jim’s Group to secure ownership of the $25,000 trailer.
‘They haven’t paid for any maintenance fees; they haven’t paid for anything, so there is nothing to be paid back to them,’ Jason argued.
‘The only thing they paid for is rego. I pay the insurance, maintenance, and they force you to get the maintenance done every year.’
Mr Penman had previously contacted franchisees in an earlier email.
‘There have been rumours based on media stories that Jim’s Dog Wash is insolvent or not operating. This is not correct,’ he wrote.
He mentioned that four franchisees had their trailer ownership transferred after they provided clear written evidence of being given a false promise.
The franchise founder also hinted at another upcoming change regarding the trailers.
‘We will be installing tracking devices on all trailers to avoid problems in the past where trailers went missing,’ he stated.
‘The alternative is to charge all franchisees extra to cover the minority who do the wrong thing, which we do not believe is fair.’
Mr Penman also noted that the group was ‘installing trackers on all trailers we own, to prevent them going astray and enable recovery if stolen, which is not uncommon’.
‘The alternative is to charge each franchisee more ongoing to cover these losses. These are hardworking women mostly, and I’d rather they kept the extra money for their families,’ he added.
In response to franchisees' complaints about inadequate training, Mr Penman stated in his email that a ‘training facility at national office’ had been set up, and ‘from early October, all new franchisees will be trained by professional groomers in a supervised course’.
He also mentioned the possibility of a class action funded by Jim’s Group against the former associate of the division.
Mr Penman stated that the ‘entire cause of this problem is that’ the individual associated with the business ‘lied to prospects’.
He indicated that the group was contemplating its own legal action against that person.
‘I am truly sorry for any and all deficiencies in the division, and determined that we will do better in future,’ he concluded the email.
Mr Penman reported that Jim’s Group had received complaints from franchisees claiming they were told they would own the trailer, which the former associate ‘vigorously denied’.
He added that the group had ‘paid out quite a lot of money to fix trailers on the understanding’ that they owned them.
‘If the trailers belonged to franchisees, then they should, of course, be looking after them. If you bought a car, would you expect the dealer to pay the ongoing maintenance? The $5000 is the fee to waive restraint of trade, which is in the contract, allowing the franchisees to go independent—which many wish to do,’ Mr Penman explained.
He also acknowledged that there were ‘serious divisions’ within Jim’s Dog Wash.
‘Franchisees were told they would own the trailers. We are working to fix that,’ Mr Penman said.
‘For those who wish to stay on and accept that we own the trailers, we are offering six months’ fees and no commission on the resale normally 20 per cent. This is by way of recognition that they were lied to and misled.’
‘This will actually cost us the best part of a million dollars. If they accept this deal then we will pay for repairs since the trailers remain ours,’ he added.
He stated that fees are essential for adequate advertising and support, noting that recent survey results indicate only 10 per cent reported low income, which is below the average for other divisions.
However, former franchisees have expressed that they were struggling to make ends meet when they acquired a Jim’s Dog Wash franchise.
As the fallout continues from the bombshell emails revealing misleading practices within Jim’s Dog Wash, another significant development has recently unfolded within the Jim’s Group.
While franchisees grapple with the implications of these revelations, Jim’s Mowing has made headlines by expanding into the health and wellness sector with the launch of Jim’s Remedial Massage earlier this year.
This strategic move highlights the group's ongoing evolution and adaptation amid challenges, showcasing its commitment to diversifying services and addressing customer needs in a competitive landscape.
*Names have been changed to protect the identities of the individuals involved.
What are your thoughts about this issue? Do you think the proposed conditions are fair? Share your insights in the comments below.
The controversy has escalated to the point that the company is now offering refunds amid allegations that franchisees were deceived.
This situation has left many Australians in distress and has led to questions about the integrity of the franchising giant.
Explosive leaked emails from a prominent chain reveal that some customers were ‘misled’, prompting refund offers.
Many Australians reported being in a ‘great deal of distress’, claiming they lost thousands of dollars in the ensuing dispute.
Frustrated franchisees of Jim’s Dog Wash, who paid $49,000 to purchase a franchise including $25,000 for the trailer, found out they would never own the trailer after a contract change in 2021.
Jim’s Dog Wash is part of the larger Jim’s Group, renowned for its lawn mowing division.
With over 5000 franchisees across 52 divisions and a turnover of around $500 million, Jim’s Group is Australia’s largest franchising company.
Jim's Dog Wash franchisees were reportedly ‘misled’ about trailer ownership, leading to a contract change and refund offers. Credit: Facebook / Jim's Dog Wash & Grooming Hornsby
Founder Jim Penman initially insisted that franchisees who signed after the contract change were aware of and accepted the new terms, which stated the group would own the trailers, as he was unwilling to ‘gift’ millions of dollars.
However, according to leaked emails, Jim’s Group has reversed its stance following growing backlash from franchisees.
On September 19, franchisees received an email from Jim’s Group with the subject line: ‘Refunds for mislead [sic] franchisees’.
The email attributed the issue to a former member of Jim’s Dog Wash division, stating it was evident they had ‘lied to prospects about the trailers becoming theirs’. Jim’s Group also claimed this individual misled them.
‘To the extent that we have been paying upkeep and repairs for trailers that based on the person’s promises, were not to be ours,’ the email read.
Several offers have been extended to franchisees in the ‘interest of fairness’, including transferring trailer ownership to enable them to operate independently of Jim’s Dog Wash.
However, this offer requires paying outstanding fees, including vendor finance, reimbursing trailer maintenance costs to date as Jim’s Group ‘covered this on the basis we thought we owned the trailer as we were mislead [sic] also’, paying a $5000 restraint of trade fee, and removing all signage from the vehicle.
The email stated that franchisees who choose to stay with Jim’s Group would benefit from six months of no fees, no commission on resale, continued trailer ownership, and coverage of insurance, registration, servicing, and maintenance for general wear and tear.
Alternatively, franchisees who opt to stay but want to own their $25,000 trailer would need to reimburse trailer maintenance costs to date, pay the $5000 restraint of trade fee, and agree to cover future expenses, including insurance, registration, servicing, and maintenance due to general wear and tear.
The email concluded, ‘If a franchisee can produce evidence that they were provided with the incorrect franchise agreement, without special conditions, we will assign the trailer ownership to them,’ subject to the stated conditions.
However, Evonne*, who bought a Jim’s Dog Wash franchise on the East Coast three years ago, expressed scepticism regarding the emails from the group.
‘Every email that has been sent to Jim asking for their trailer to be transferred to them so far, he’s rejected so I don’t believe a word of what Jim’s Group says to be honest,’ she shared.
She suggested that the emails were ‘very likely a response’ to articles from news.com.au and an upcoming feature on The Project, intended to ‘try to save face for the brand’.
She also stated that the former business associate is ‘absolutely the scapegoat’ who has been thrown ‘under the bus’, adding, ‘Otherwise, they are liable for a lot of money.’
‘We’re likely going to send a counter-proposal with adjusted terms because no one agrees with paying additional for a trailer we were already lied to about.’
‘The email is also only addressed to current franchisees and doesn’t address what they plan to do for the franchisees under these contracts that have already left, if at all,’ Evonne added.
Meanwhile, Jason*, who has owned a Jim’s Dog Wash for the past 18 months, stated that the situation was a ‘hell of a lot better’ than not owning the trailer, making it worthwhile for him to stay.
Nevertheless, he believes Jim’s Group was compelled to make this decision.
‘They realised so many people were getting together and they were going to have a class-action suit against them, so they are taking their losses,’ he speculated.
‘It’s them covering themselves, but it's still a hell of a lot better for me…considering the fight I was possibly going to be going through.’
However, he also disagreed with the proposed fees that needed to be paid to Jim’s Group to secure ownership of the $25,000 trailer.
‘They haven’t paid for any maintenance fees; they haven’t paid for anything, so there is nothing to be paid back to them,’ Jason argued.
‘The only thing they paid for is rego. I pay the insurance, maintenance, and they force you to get the maintenance done every year.’
Founder Jim Penman acknowledged the issues, apologised for the shortcomings, and outlined measures to address the situation, including legal action against the person who misled franchisees. Credit: Facebook / Jim Penman
Mr Penman had previously contacted franchisees in an earlier email.
‘There have been rumours based on media stories that Jim’s Dog Wash is insolvent or not operating. This is not correct,’ he wrote.
He mentioned that four franchisees had their trailer ownership transferred after they provided clear written evidence of being given a false promise.
The franchise founder also hinted at another upcoming change regarding the trailers.
‘We will be installing tracking devices on all trailers to avoid problems in the past where trailers went missing,’ he stated.
‘The alternative is to charge all franchisees extra to cover the minority who do the wrong thing, which we do not believe is fair.’
Mr Penman also noted that the group was ‘installing trackers on all trailers we own, to prevent them going astray and enable recovery if stolen, which is not uncommon’.
‘The alternative is to charge each franchisee more ongoing to cover these losses. These are hardworking women mostly, and I’d rather they kept the extra money for their families,’ he added.
In response to franchisees' complaints about inadequate training, Mr Penman stated in his email that a ‘training facility at national office’ had been set up, and ‘from early October, all new franchisees will be trained by professional groomers in a supervised course’.
He also mentioned the possibility of a class action funded by Jim’s Group against the former associate of the division.
Mr Penman stated that the ‘entire cause of this problem is that’ the individual associated with the business ‘lied to prospects’.
He indicated that the group was contemplating its own legal action against that person.
‘I am truly sorry for any and all deficiencies in the division, and determined that we will do better in future,’ he concluded the email.
Mr Penman reported that Jim’s Group had received complaints from franchisees claiming they were told they would own the trailer, which the former associate ‘vigorously denied’.
He added that the group had ‘paid out quite a lot of money to fix trailers on the understanding’ that they owned them.
‘If the trailers belonged to franchisees, then they should, of course, be looking after them. If you bought a car, would you expect the dealer to pay the ongoing maintenance? The $5000 is the fee to waive restraint of trade, which is in the contract, allowing the franchisees to go independent—which many wish to do,’ Mr Penman explained.
He also acknowledged that there were ‘serious divisions’ within Jim’s Dog Wash.
‘Franchisees were told they would own the trailers. We are working to fix that,’ Mr Penman said.
‘For those who wish to stay on and accept that we own the trailers, we are offering six months’ fees and no commission on the resale normally 20 per cent. This is by way of recognition that they were lied to and misled.’
‘This will actually cost us the best part of a million dollars. If they accept this deal then we will pay for repairs since the trailers remain ours,’ he added.
He stated that fees are essential for adequate advertising and support, noting that recent survey results indicate only 10 per cent reported low income, which is below the average for other divisions.
However, former franchisees have expressed that they were struggling to make ends meet when they acquired a Jim’s Dog Wash franchise.
As the fallout continues from the bombshell emails revealing misleading practices within Jim’s Dog Wash, another significant development has recently unfolded within the Jim’s Group.
While franchisees grapple with the implications of these revelations, Jim’s Mowing has made headlines by expanding into the health and wellness sector with the launch of Jim’s Remedial Massage earlier this year.
This strategic move highlights the group's ongoing evolution and adaptation amid challenges, showcasing its commitment to diversifying services and addressing customer needs in a competitive landscape.
What are your thoughts about this issue? Do you think the proposed conditions are fair? Share your insights in the comments below.
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