‘Sticking the knife in’: Aussies walk away

One of Australia's best known chains has come under fire as people speak out about how little they made in the job.

Australians who signed up to be a part of one of the country’s most popular chains have raised the alarm over how little they were making as they struggled to survive and poured a large part of their earnings into fees and loans.

News.com.au got an exclusive look into Jim’s Dog Wash after franchisees revealed they were under “great deal of distress”, amid claims they have missed out on thousands of dollars over a bitter dispute surrounding trailers.

Now, former franchisees of Jim’s Dog Wash are coming forward to share claims about the “painful” reality of joining the group as they struggled to survive on very little money.

Jim’s Dog Wash is part of Jim’s Group, which is best known for its lawn mowing division. Jim’s Group is Australia’s largest franchising outfit with more than 5000 franchisees across 52 divisions and a turnover of approximately $500 million.

There are 260 franchisees across Australia and New Zealand, according to its website.

Penelope* left a job paying $75,000 a year to buy a Jim’s Dog Wash franchise but lasted less than a year.

She made just $49,000 once all fees and loans were paid but the business failure was blamed on her not working hard enough, she claimed, despite being on the job six days a week.

A Jim's trailer with an AI background so as not to identify the franchisee. Picture: Supplied

One aspect of the franchise business that many are critical of is paying Jim’s Groups for what is called leads.

These are inquiries made to the centralised call centre, which cost franchisees $12 per call at the time – with the fee increasing in recent years.

However, there is no guarantee these leads will result in work as it could be a potential customer just inquiring about pricing for example, Penelope said.

“Of course I had just started a brand new business so every person I was getting through was from this call centre. I had my loan, which ended up being between $700 and $750 a month and then $1000 in Jim’s fees a month and then the first month I got a bill of about $600 which was all the leads I had to pay for, which is a lot,” Penelope told news.com.au.

“I was a single mum and they … blamed me for the failure. I’m not egotistical but I went from managing 60 staff and a $7 million budget – I could run a small business. But all the fees were astronomical. I felt like I was in a scheme where everyone was doing so well above me and I was struggling.”

Statements provided to news.com.au showed Penelope paid $1200 in franchisee fees to Jim’s in the first month and then almost $1600 the second month.

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Franchisees were paying around $1000 in fees a month. Picture: Instagram

Jim’s founder, Jim Penman, told news.com.au it was correct that some franchisees are making “very little money”.

He said an annual survey of franchisees last year showed nine per cent reported a poor income.

Jim’s Group also conducted an independent survey, which recorded 14 per cent of people saying they had poor income, but Mr Penman said it only had a 30 per cent response rate.

“Am I unhappy about the nine per cent? Absolutely, and we need to do better,” he said.

Current lead fees are $14.26 minus 15 per cent to “allow for dud leads”, he added.

‘Some people feel bitter and abandoned’

Penelope had to take out a loan from Jim’s to finance some of the $45,000 fee to purchase the franchise but also had to borrow money from her parents to pay a $15,000 deposit.

She was told she would make “$1800 a week easily” but this was never the case.

“I contacted them so many times asking for help. I had so many promises and you are told you need to work more and put your prices up,” she said.

“When people rang I would get turned down as I was too expensive and I still had pay for those calls.”

Mr Penman said if a franchisee is doing poorly they might be challenged to raise their prices but it was “not difficult because most are flat out”, work longer hours or upsell to more lucrative services such as grooming.

Jim Penman owner of Jim's Group. Picture: Jason Edwards

They might also be asked to reduce travel by working in specified areas each day of the week, offer extras such as dog food, cut administration time by the use of software such as our Jim’s Jobs system and attend meetings so they can gain new skills.

“Mentoring and advice is the key role of a business coach, and would seem to me the very essence of support’,” Mr Penman said. “This is a key reason why our attrition rate is so much lower than for independents.”

He added “some people feel bitter and abandoned” but he said Jim’s Group go to “immense efforts to look after them”.

“I also give my direct phone number and email address to every franchisee at training and repeatedly urge them to contact me, including after hour and at weekends,” he noted.

“We do everything possible to make sure they are not abandoned.”

‘Burst into tears’

Charlene* bought a Jim’s Dog Wash franchise in 2021, after recovering from cancer treatment.

She also discovered it was impossible to make enough money to survive unless she was prepared to work seven days a week for 12 hours each day.

She paid a $12,000 deposit and took out $33,000 in vendor finance.

“I took money out of mine and my joint partners account to join to do it,” she said.

“I put us in such debt that three years later we are now only just getting back on our feet.”

Charlene said despite being told a franchise would giving her the freedom to spend time with her family, work when and how she wanted, including part time – that wasn’t the financial reality.

“So vendor finance was $900 a month and my fees were $750 and some weeks I was lucky to make ends meet. I was just lucky that my partner earned enough and he could keep us afloat,” she said.

“Some months I would make $900 a week, some $400 a week and I ended up with mental health issues as well … I rocked up to a client’s house one day so stressed … and burst into tears.”

Franchisees aren't happy with their experience at Jim's Dog Wash. Picture: Instagram

Back breaking work

Charlene said the reality included aggressive dogs and back breaking work that saw her end up at the chiropractor.

“Jim’s Group don’t tell you other side of it – the dogs that want to eat your face, the long days, I worked seven days, it really affected my partner’s and my relationship and you are told you aren’t working hard enough,” she said.

“I was that stressed about making my half of mortgage and bills I worked seven days and you still didn’t make ends meet.”

As news.com.au previously revealed, franchisees who signed up from 2021 no longer hold ownership over their trailers despite forking out $25,000 for them.

Mr Penman said the change was made because many franchisees were stripping off their signs and going independent, taking their customers with them as well as the use of intellectual property, including trailer design.

Yet despite a fault in a piece of equipment in Penelope’s trailer just months into her starting, which caused two scary separate incidents, she was told it was her responsibility to pay for repairs.

Mr Penman said if franchisees take over a trailer with faulty equipment, Jim’s Group will fix it.

“They are asked to regularly maintain their own equipment, while we handle major issues such as airconditioning,” he said.

“If we were to handle all servicing, such as done by car rental companies, then franchise fees would have to be astronomically higher.”

Franchisees said they struggled to survive financially. Picture: Instagram

Criticisms about training

Some franchisees have also been critical that they are offered just two weeks training when it comes to the dog grooming.

Penelope said she received her training from a person in their early 20s who had only been dog grooming for a year.

“I still just look back on Jim’s with a sick feeling in my stomach even down to the training,” she said.

“I’m lucky that dog grooming comes naturally. I’ve had to help so many people that were with Jim’s and only get two weeks training in a trailer. I’ve learned so much after finishing that so called training, and more from YouTube.”

Charlene was also critical of the training.

“I chose (Jim’s) because of training you got but that training wasn’t the best,” she claimed.

“I wasn’t confident. I only ended up doing washes so that limited me.”

There had been issues with Jim’s Dog Wash training, Mr Penman conceded.

“So we are arranging a new system where all training will be done on site,” he said.

“One point you need to recognise is that most franchisees are women, and do not want to be separated from their families for so long. They strongly prefer local training but, as you can see, it is not always best for them in the long run.”

Another area Jim’s Group need to do better is selection of franchisees, he added.

“About a month ago I heard a shocking story of a dog wash franchisee who was signed despite a negative report from her on-the-road trial. Fortunately, she cancelled within a fortnight so we simply gave her money back,” he said.

“I then told our documents department that they must never sign any prospect without seeing a written report from the trainer, approving them as being suitable. I must emphasise the trainers are paid to take prospects out but are given no incentive to pass them.”

Jim's Group founder conceded that changes need to be made to their dog grooming training. Picture: Instagram

‘I can’t make the money’

In the end Charlene said she surrendered her trailer.

“I said: ‘I can’t cope anymore, I can’t do this’,” she added.

Meanwhile, Penelope said the image she was sold of Jim’s Group wasn’t what she experienced.

“It (was like) I should feel so privileged that I had got this job with Jim’s – that it was this amazing family but it never ever felt like that whatsoever,” she added.

“In the end, I said I’m leaving, I can’t do it, I can’t make the money.”

Penelope said she was still catching up financially including paying back her parents.

“The only thing I’m grateful to have is to have changed into the industry but I’d have done it in more supportive and less painful way, if I borrowed $20,000 and bought a trailer,” she said. “I would have been fine but it was the Jim’s that really did me over.”

Mr Penman said a recent report showed the portion of dog wash franchisees who leave in the first year over the past four years was 20 per cent although at the time they owned the trailer, while a second survey showed of those who signed on a year or two ago only 13 per cent left.

Surprisingly both women weren’t pursued for their outstanding debt from the vendor finance loan, which was a huge relief.

“I was told that the vendor finance is only when you have a franchise and because you don’t have a franchise anymore you don’t have to pay loan,” said Charlene.

“Why do we have to do this if this is the outcome?”

Mr Penman added: “Why would anyone want us to pursue a failed franchisee for vendor terms? It’s bad enough that they failed, without sticking the knife in.”

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Originally published as ‘Sticking the knife in’: Aussies walk away