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Franchise veteran Jim Penman says he has given up plans of finding a backer to put up $10 million for the business and instead will revert to his original plan to float the company on the ASX – although he warns it's still a few years down the track.
The comments come just a few months after Penman, founder and CEO of franchise Jim's Group, told SmartCompany he was looking for $10 million in order to expand the business, which he said could end up being worth over $1 billion in several years' time.
But today, Penman says no backers came forward.
"We didn't have anyone coming forward, so we've dropped out of that one, and now we'll be working towards an initial public offering in a few years' time."
Earlier this year, Penman said he wanted to list the company before the end of 2012. But, in April, he put those plans on hold in order to raise $10 million, and now he says he may have rushed the whole endeavour.
"I probably didn't approach this in the right way, but we don't urgently need the cash. We're doing quite well right now."
"I actually didn't realise how much work was involved in the IPO when I first put the idea forward. But then we got some advice, and we realised that there's a lot more to it than you would first realise."
The initial declaration of an intent to float was taken with scepticism given the current state of the market – and the fact no backers have come forward seems to confirm that view.
However, despite the setback, Penman claims the franchising group is performing well, with profitability improving and a number of new franchises being released – including home security and insurance divisions.
"When you want to do an IPO, ideally you want to be a little more profitable. Having said that, we're having a very good time profit-wise, complaints are low, and the whole business is going very well."
One of the reasons Penman used for delaying the IPO was that the company's decisions can often affect the next quarter's profits in unusual ways.
The company is turning over nearly half a billion dollars, with more than 3,000 franchises across 28 categories. And even with a lack of funds to continue the company's expansion, Penman says the business is on the right track.
"We think we can grow into a larger company, and we're having a very good year."
This article first appeared at SmartCompany.