The referendum held among Jim’s Group franchisors is meaningless and doesn’t have any legal validity, founder Jim Penman said.

Recent reports have sparked controversy that Penman could be voted out of the company by disgruntled franchisors, after it was revealed that 89 per cent wanted him out of the company. In a system that allows franchisors to be voted out by franchisees, this is, in theory, entirely possible.

Jim’s system is, you might say, rather crazily democratic. For example, if there’s any change to the manual that the franchisors don’t like, then the franchisors can actually vote it down. It’s a simple majority vote, Penman told Franchising.

It has been reported that franchisors were revolting against an increase in fees, which had the potential to double the amount that they paid to head office. According to Penman, this is not the case. Rather, the dispute has been caused by a proposal for new regional franchise contracts, requiring franchisors to pay higher fees if they weren’t performing after several years.

This proposal has since been revoked.

Penman argues that because the number of franchisors participating in the referendum is unknown, the reliability of its results are questionable, to say the least. When you put out wild stories saying that 89 per cent of franchisors don’t want Jim, people don’t realise that you might be talking about eight people, he said.

He also insists that the referendum was instigated by an ex-franchisor, Paul Carr, who is looking for revenge after being voted out of the group in the United Kingdom.

The referendum was put down by an extremely hostile person … and it wasn’t a formal referendum. It was just a diatribe that said ‘register your hatred of Jim here’, so the only people that were going to actually put in for it are those that don’t like me, which is a fairly small minority. It was done in such a way that if you actually tried to vote for me, at least on one occasion, it just ignored your vote, so it’s in no way a credible referendum.

Penman believes that his approval within Jim’s Group would be approximately 75 per cent.

The group holds committee meetings every three months, attended by a group of franchisors, and Penman is considering addressing this issue at the next meeting.

There is a proposal for a referendum to be put out properly, to do it via a third party, to have it properly disclosed, have them say exactly how many voted, and have it subject to proper scrutiny in a way that this ridiculous referendum wasn’t  he said.  

Jim’s Group, which spans 28 different franchises including computer services, mowing and painting, is the second largest franchise system in Australia, following Australia Post, with 2,750 franchisees in Australia alone.