Whether you have $15,000 or $800,000, choosing the best-value franchising system is challenging indeed. To make the task less daunting, Jackie Pearson has spent the past three months examining Australia's more than 1000 offerings - to arrive at your nine top choices.

Within four years, John and Sharon Hasaballah have developed their single Jim's Mowing franchise on Queensland's Sunshine Coast into the equivalent of 17 normal Jim's business units, with 425regular clients and 11 full-time staff.

"We're what's known as a multi-unit franchisee," John explains. "We've purchased other Jim's Mowing franchises but the majority of the growth is definitely through picking up more clients. Being with a well-recognised national brand definitely helps, and the ability of Jim's to advertise. You just can't get that much spending as an individual small-business operator." Jim's franchising fees are about $400 per calendar month, plus $6 for each lead put through to a franchisee. This is one of the attributes that has seen Jim's system score so well, for the second year running, in AFR Smart Investor's annual franchise survey.

In our category for initial investments totalling less than $50,000, Jim's has the highest score of 78 per cent. "The main reason we went with Jim's is that you pay a set fee on a monthly basis, [so that as your business grows], you don't have to pay more to the franchisor," John says. "We also always get a 24-hour response to any questions, and we get an answer to whatever question we ask." There are 23 Jim's Mowing franchisees on the Sunshine Coast, but John says the number of potential clients is unlimited.

"If franchisees are busy, they can take themselves off the national computer system and the work will flow through to an available franchisee. We don't think there's any limit on how big you can get when you have your structures in place - we're not far off turning over $1 million a year." Always on call
Another feature of Jim's that John Hasaballah finds helpful is the availability of the business founder, Jim Penman. "We are the largest Jim's operator in Australia, so I can call Jim direct at any time; but you get that personal contact even if you are the smallest."

Penman says that all franchisees across all divisions receive his direct line and mobile phone number. "I find it very useful to speak with them," he says". Sometimes they're just being unreasonable: they say, 'My franchisor isn't doing this to help me.' And I say, 'Well, it's your business, you should be doing that'. Sometimes they come up with insights that lead to changes and improvements to our processes."

Penman started out 26 years ago "as a student doing a PhD in history and mowing lawns because I needed a job. I found myself with a degree and no prospects of employment, so I started Balwyn Gardening in Melbourne. "I had my first subbies [subcontractors] employed within a year, and 6 1/2years later, in 1989, I started to franchise. I found a lot of problems with quality control when I had subbies, so I basically switched to a business of building up and selling lawnmower rounds, and franchising was the next step."

The Jim's brand now offers franchising in cleaning, fencing, antennas, building maintenance, electrical testing and tagging, mobile dog-washing, pool maintenance and bookkeeping, "about 25 divisions, but some are quite small", Penman says. "It was kind of obvious we had a franchising system with a lot of potential to apply to other things."

There are now more than 2700 Jim's franchisees in Australia, New Zealand, Canada and Britain. Penman says Jim's has to knock back 70,000 business leads a year and is always looking for good franchisees. "If I could find an extra thousand franchisees over the next year, I'd find work for them."

People preferences
All our top franchisors in this year's table, including Jim Penman, are picky about whom they will accept as a new franchisee.
Penman says he looks for skilled business people who have worked in management or supervisory positions. "It's mainly just their character, they have to have ambition; you're looking for someone who has been a top-level employee who you know is going to get the job done. We have a lot more former bank managers than gardeners," he says.

( Full article can be found in "Financial Review Smart Investor" magazine December 2008 issue. )