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The dark side of start-ups

The dark side of start-ups – SMH

Over the past 20 years, I have founded and funded numerous technology start-ups. During that time, I have seen a clear pattern emerging: start-up failure has become an accepted industry norm, and it has an impact that reaches far beyond financial loss to investors.

Having experienced my own journey of failure as a founder more than once, I have felt the very real, deep, personal impact of that failure on me, my family and my colleagues.

After my last start-up failure (a very public technology IPO crash) I couldn’t get out of bed for three months. My family received death threats. I had to move to a new house. I suffered terribly from depression and had some very dark thoughts. It was the low point of my career as an entrepreneur.

With a lot of support from my friends and family I managed to get back on my feet – and I wanted to help other founders who were struggling with failure and the stigma attached to it.

Approximately three start-ups are founded every minute. Of those start-ups, 92 per cent will fail within three years. Just think about that for a second. That is a lot of failure. And while a lot of work is being done to improve the success of start-ups, the reality is that entrepreneurs need to brace themselves for more failure than success. Entrepreneurs need to failure-proof themselves.

Unfortunately many entrepreneurs are numbing out, burning out or checking out. A total of 17 per cent of entrepreneurs say they have abused alcohol or drugs. According to a UC Berkley study, 72 per cent self-identify with having a mental health concern – be it depression, anxiety, bipolar or ADHD. Even more alarming is suicide is on the rise with founders.

But isn’t the start-up game meant to be fun, exciting and glamorous? Don’t we keep seeing successful start-up founders smiling on the front pages of the business press having completed their latest triumphant capital raising or IPO? The culture of ‘I’m crushing it’ makes it hard for founders to admit they are struggling.

The financial waste in failed start-ups is fairly widely understood; less recognised is the largely unspoken issue of mental waste. Founders are simply fatigued! I started talking to founders, and what they shared with me didn’t surprise me at all. Many of the first-time founders I spoke to were lost, with no map to guide them; even the more experienced founders, burnt out or stressed out, felt alone, isolated, with nowhere to turn for support. This is the dark side of start-ups.

In my opinion, to be a great founder you need both capacity and capability. Often founders work only on building capability — that is, learning the specific skills they need to do the job. While having these skills is essential, having the capacity to go the distance is far more important. Capacity gives you reserves. It’s your fuel tank. It provides you with a solid foundation on which to build skills.

Great founders exhibit three common traits – resilience, adaptability and awareness. It’s hard to learn these characteristics from a book or an online course. They develop over time, often experientially. Some founders are naturally gifted in some of these areas, others need to work hard on developing their empathy and self-awareness. Regardless of how they develop them, founders who focus on these areas outperform those who focus on the purely technical or structured sides of building a business.

At the heart of capacity building is a strong focus on physical, mental and emotional fitness. The norm in start-ups is founders usually put themselves last – focusing on customer, products and their team. All of these areas are important, however if the founder is not taking care of themselves then they are working from a very shaky foundation. I see many founders who don’t eat well, who drink too much and aren’t getting enough sleep. They have bought into the idea that “it’s about the hustle” and if they aren’t working 24/7 on their start-up then they aren’t committed. This approach is not sustainable.

I think things are going to get worse before they get better. Founding a start-up has become the new black – and while I welcome the increasingly vibrant ecosystem, I worry that as nine out of 10 founders experience failure, the human impact increases. Because founders so closely identify with their start-ups, when failure comes it is often taken very personally.

Because of my own experiences and seeing the isolation and pain that other founders were going through, I co-founded a not for profit called The Founder Circle – a peer support group for founders who can come and draw upon the experiences of other founders and seek support on things they cannot normally speak about with anyone else – be it relationships, their physical health or their head-space. If you are a founder and feel you need support, you can register to attend one of our free support groups.

Comments in the SMH on Jamie Prides article


2 weeks ago
A very important and valuable article for anyone involved in running their own business, especially in tech start-ups – where the expectations are so high, the hours ridiculous and the personal toll, excessive. Great to hear with true honesty about the realities. Every founder should get involved with the Founder Circle – if, for nothing else, as a mutual sounding board – and as many mentors as possible should equally support. You can’t teach experience but you can help others deal with the road that needs to be travelled. A helpful and supportive ear can bolster beyond compare any tech start-up. I mentor a couple of start-us and I am proud and pleased to do so. Big shout-out to Jamie Pride for his honesty and willingness to help others through the difficult times. Respect…


3 weeks ago
many a business owner will tell you they wished they never entered a business partnership ( angel investor) ; they say it all starts rosy and pretty soon things turn sour — its the problem of friendship and being owners of the business.

The most successful are the ones who start solo and sub contract the various business functions.

they sleep soundly at night

Kym P

3 weeks ago
Jamie, firstly, I’m sorry to hear what you went through and i’m so glad that you are out the other side and back on your feet.
I’m a Brisbane based founder 25 years in and can totally relate to your article. The journey of business is not for the faint of heart. I have been through so many ups and downs i swear i practically live on a emotional roller coaster! I’ve had many a dark night of the soul wondering if i would get through (whatever the challenge was that i faced at the time).
I still believe in the good that we do for our clients but i often wonder, had i known what i was getting myself into, would i have chosen this entrepreneurial path! (and… on my good days – of course i say yes – right!)
Congratulations on launching your new project, i’d be happy to speak or help if you would like


3 weeks ago
These are the reason’s why a good (right) Angel Investor can work beside you to help scale. I have seen this work for over 2 decades. Christine Kaine


3 weeks ago
True strength is revealing your hardest times. Great article.

Rover the dog

3 weeks ago
“Approximately three start-ups are founded every minute. Of those start-ups, 92 per cent will fail within three years.”

I always thought that was the norm in any business. Many who start a business, or in this case a start up have incredible odds stacked against them for success.

Even if a business can become established, they face the ever present fight to survive from all other businesses fighting to take their customers and business from them.

So “investors” must be aware that when they put money into any start up, there is a high risk of non return.

And the same goes for entrepreneurs. Expectations need to related to reality and being at the helm of the next Facebook, Amazon or google etc are so rare that they can be counted as one in a million.

Justin Babet

3 weeks ago
Great article, thanks Jamie, hope you’re doing well. Have been down this road myself and it’s a hard one. Part of the issue is the culture in Australia which views a loss as failure. In other markets, particularly the US, a loss is seen as a necessary stepping stone to success. Many VCs look for founders who have ‘failed’ before because they know those founders have very valuable (and harsh) experience. They understand that a win often comes from the most unlikely of places. The craziest ideas often morph into a highly successful business because of entrepreneurs who are able to fail repeatedly, learn, adjust and keep going until they eventually succeed. This is more likely when investors understand that’s how it works, have patience and a willingness to continue to invest.

Basically what I’m saying is we need to recognise that to succeed we need to fail, a lot.

To all the entrepreneurs out there, everyone goes through the same sleepless nights, self doubt and exhaustion. The best thing for me was to spend time with others going through the same thing which makes it pretty obvious the hyper success stories are the only ones that make the paper. Embrace the failures, learn from them, adjust and keep going.


3 weeks ago
As long as VCs are willing to throw money at anything that has a mere sniff of possible success startups will fail when they don’t have the killer idea.

Not everone has an Uber, Facebook or Google type of idea.

Justin Babet

3 weeks ago
Amazed I completely disagree. If you research those that succeed they’re full of ideas like Airbnb that looked rediculous before they started to win – have a complete stranger share a room in your house? Yeah that’ll catch on… We only think something is obvious when looking in the rear view mirror. They’re also full of companies that have completely changed their business like Slack which started as a game design company. The fact is we need to get comfortable with failure, except in the rarest of examples it’s the only way to succeed.


3 weeks ago
Well said Justin Babet. I’ve pitched to 100’s of investors, and I’d say VC’s are definitely not throwing money at start ups… they’re actually quite conservative these days, especially in AU where they have the risk profile of a PE firm.

In a way this helps to limit failure, but it also stamps out the creative risky ideas… like letting a total stranger stay at your home.

Thanks to you and Jamie for sharing your personal stories on dealing with the pressures associated with launching a new business.
We all may be feeling the affects, but not talking about it nearly as much as we should.

Cup of sorrow: the brutal reality of Australia’s franchise king – SMH


Adele Ferguson & Sarah Danckert

Julia Banks will never forget the panic attacks. She still finds herself waking up in the middle of the night, heart pounding and mind racing, from the stress of running a Donut King franchise in Marsden, Queensland. As debts and losses mounted, Banks and her husband John lost their savings and family home.

“It’s pretty well destroyed our lives,” she says.

Bad case of corporate indigestion

Retail Food Group has been expanding for years, buying one retail food chain after another across Australia.

The Bankses started their Donut King store in early 2015 under a franchise agreement with Retail Food Group (RFG).

Gold Coast-based RFG is the country’s biggest food franchise operator, whose brands include Donut King, Brumby’s, Gloria Jean’s, Pizza Capers, Crust Gourmet Pizzas and Michel’s Patisserie. It has a market capitalisation of about $800 million and claims to have more than 2500 stores.

In November the couple reached breaking point. They cleaned the store, packed up the doughnut maker and coffee machine and took staff to a Christmas lunch at Sizzler to break the news that they had closed permanently.

“It was heartbreaking, but what could we do? We had run out of options.”

Days after closing, John Banks wrote to RFG’s managing director, Andre Nell, telling him his Donut King had joined the growing list of stores that had either been closed, sold at a massive discount to its purchase price or become a “ghost store” – where RFG is still on the hook for rent but the shop does not open its doors to customers.

John Banks asked Nell to buy back the store the Bankses had bought for $230,000 via an agent hired by RFG, arguing the company had sold them a lemon. Banks says they were given the sales figures for the store as part of the sale process, but only when they signed on were they given financial accounts. Those accounts revealed, they say, that their newly purchased store was in fact losing $120,000 a year under RFG management.

“We question whether a reasonable person would consider that RFG and its representatives acted in good faith when making this sale,” he wrote.

John is yet to receive a response, but RFG did send him an invoice for the latest rental payment due.

This network has created a lot of human misery. They’re all unhappy. I haven’t met a happy one.

Michael Sherlock

This is the reality of life inside the RFG juggernaut.

Growth by acquisition

Since listing on the ASX in 2006 at $1 a share RFG has, for most of that time, produced record profits, double-digit returns on equity and fat dividend payouts for shareholders. In 2015 RFG stock hit $7.15. It built a reputation as a franchise amalgamator as it spent more than $500 million in the past decade on 15 acquisitions including Crust Gourmet Pizzas, Pizza Capers, coffee chain Gloria Jean’s, Café2U, DiBella Coffee and Hudson Pacific, a food manufacturer and distributor.

That scale has also seen it become one of the country’s largest coffee roasters, as it sells to its Brumby’s, Michel’s and Gloria Jean’s franchisees. In an Australian franchise sector estimated to be worth $146 billion in sales, and where there are four times as many franchisors per head here as in the US, RFG had become a serious player.

But it seems this phenomenal growth has come at a cost. A three-part investigation by Fairfax Media into RFG has uncovered a brutal business model that is pushing franchisees to the wall.

Former chief executive Tony Alford at the time of the company's listing on the ASX.Former chief executive Tony Alford at the time of the company’s listing on the ASX. Photo: Robert Rough

There is systemic wage fraud as franchisees do whatever it takes to make ends meet, the use of sham employment contracts and the underpayment of overseas workers hired on holiday visas.

The series also looks behind the man who floated RFG, Tony Alford, a Tasmanian- born accountant who has made hundreds of millions of dollars as the major shareholder in RFG and related businesses. It is under his leadership that RFG added to its brands and expanded overseas.

As part of the investigation, Fairfax spoke to many current and former franchisees and workers. It obtained confidential franchise agreements and financial accounts, disclosure documents, marketing fund reports and internal correspondence between RFG and franchisees. It trawled through court cases and court records to piece together a complete picture of RFG.

Signs of stress

The evidence of gouging and underpayment comes as RFG’s balance sheet is starting to show signs of stress. In June a UBS note suggesting RFG may need to restate its accounts to meet new accounting standards sparked a market slump of 11.3 per cent.

Chairman Colin Archer then issued a warning at the company’s annual meeting late last month, saying that RFG had become the target of “relentless” short selling by hedge funds hoping to drive down the share price. Archer also used the meeting on the Gold Coast  to announce a company-wide review aimed at ensuring franchisees were paying staff correctly.graphic

Some of the problems facing the stores are linked to the well-documented problems shopping centres have faced over the past few years.

But much is attributed to a squeeze on franchisees from crippling fees, rising labour costs as well as higher rent and food imposts.

At the same time franchisees claim reduced support from head office as RFG attempts to cut costs to preserve margins.

They complain of too little product innovation, too little advertising and, in the case of Michel’s, poor quality food.

This spoiled cake was received by a franchisee.This spoiled cake was received by a franchisee. Photo: Supplied

Documents show some stores are manipulating their sales to try to avoid the royalties charged by RFG on every transaction. Fairfax Media can reveal RFG has been trying to manage this problem by hiring mystery shoppers, conducting audits and hiring a surveillance firm, Quantum Corp, to write observation reports that effectively spy on franchisees.

Fairfax has sighted documents that show the observation reports itemise the time of sale, type of sale, whether it was cash, takeaway or dine-in and who served the customer.

In the document cited, part of the audit involved using mystery shoppers. If franchisees were caught they were issued with threatening letters including demand for a payment of a franchise service fee and marketing fund contribution.

The network is littered with franchisees who have lost their homes, suffered marriage breakdowns and decimated retirement savings. Many lament that when they tried to sell their stores there were no buyers.

A single mother in her late 40s running a Gloria Jean’s franchise left the system last year, losing everything, and is now working evening shifts at McDonald’s to make ends meet. She declined to be named for personal reasons.

In May a Donut King franchisee offered to sell a store in Currimundi, Queensland, for $1 after failing for a year to find a buyer.

There are others who have come forward despite fears of reprisal because they are desperate and want their plight aired.

One of those happy to speak is former Brumby’s founder and former managing director Michael Sherlock.

Michael Sherlock is the original founder of the Brumby's bakery chain. and is unhappy with how the business has been run by new owners RFG.Michael Sherlock is the original founder of the Brumby’s bakery chain. and is unhappy with how the business has been run by new owners RFG. Photo: Jason South

Sherlock sold the Brumby’s franchise network to RFG in 2007 for $46 million and says he is surprised it has taken so long for the stories to come out.

Sherlock says a good franchise business is based on happy franchisees.

“This network has created a lot of human misery,” he says. “They’re all unhappy. I haven’t met a happy one.”

Wherever he looks, shops are for sale or empty.

“How many stores are trading is the question?”

Open stores

RFG bought Brumby’s at a time when there were 321 stores in the chain and had plans to grow. Now, according to RFG’s most recent full-year results, there are fewer than 246 stores.

This figure doesn’t identify how many of those stores are not currently trading, with RFG declining to provide any further detail.

Sherlock believes RFG should have had 600 Brumby’s stores by now. Instead, franchisees have either walked away or become “dinosaur franchisees”.

These are “poor people”, he explains, who have “got old, they still own it and they can’t sell it, so they’ve just got to keep working.

“It was their nest eggs, their retirement, that they were going to sell or give to their children.”

When Sherlock sold his stake in Brumby’s he kept seven stores, but under the RFG model they started losing money. He extricated himself from the last store 18 months ago, at Kenmore Village in Brisbane. It was debadged and sold for just $10,000.

Sherlock says one of his stores went from making a profit of $100,000 a year to a loss under RFG control. He blames a rise in the cost of goods, a decline in head office support and a lack of innovation of products.

“It is run for shareholders, not franchisees,” he said.

“The model is to cut out all the overheads, get rebates, charge lots of fees and keep shareholders happy.”

Store numbers

At least 200 stores have closed in the past 12 months. A number of Pizza Capers are available for sale. Currently there appears to be no Pizza Capers stores in Victoria.

Michel’s and Brumby’s stores are closing all over the country and, while Gloria Jean’s is struggling as competition intensifies in the speciality coffee shop sector.

Wayne Hong a franchisee who owns the Michel's Pattiserie store in Knox Shopping Centre says his dream was ruined.Wayne Hong a franchisee who owns the Michel’s Pattiserie store in Knox Shopping Centre says his dream was ruined. Photo: Joe Armao

Wayne Hong, who has a Michel’s franchise at Knox Shopping Centre in Melbourne’s eastern suburbs, says he will leave when his agreement runs out in six months.

“They treat us like dogs,” he says.

“It was a dream to have my own business, but it turned out they treat us like shit.”

Devi Trimuryani, who has a Michel’s in Newcastle, tried to leave last year but couldn’t find a buyer.

After buying a Michel’s Patisserie in 2012 she has torched her life savings and racked up debts of $100,000 to Retail Food Group.

“I worked hard and saved up every dollar and it is worth nothing,” she says. “I don’t want to cry, but I don’t know what to do.”

Michel's Patisserie owner Devi Trimuryani says she wants to sell.Michel’s Patisserie owner Devi Trimuryani says she wants to sell. Photo: Marina Neil

“I tried to sell the business last year but who’s going to buy a store that loses money?”

Fairfax can also reveal hundreds of stores are for sale, or about to go on sale, on websites including Gumtree and, as well as in local Chinese-language newspapers.

As recently as December 3, Seek listed 40 Brumby’s stores for sale and 37 Michel’s stores for sale, while 21 Pizza Capers –- more than a quarter of the total network, according to Pizza Capers’ website – are also on the market. There are also 23 Crust stores, 43 Donut King stores and 51 Gloria Jean’s stores for sale. While some are new businesses, the bulk are for resale.

For industry insiders, any franchise network with more than 10 per cent of stores for sale is thought be under pressure. Fairfax Media estimates 17 per cent of Gloria Jeans stores are for sale; at least 25 per cent of Pizza Capers are for sale.

Fairfax Media sent RFG a series of more than 50 detailed questions on the day of its annual meeting. They included asking how many stores were for sale and how much of the network that represented. RFG also was asked the number of stores in each brand losing money, the number of stores in each brand breaking even, the number of terminations and the average sales per brand.

Challenging market

RFG did not respond in any detail. Instead, it issued a short statement saying it recognised its franchisees were operating in a challenging and evolving retail market, particularly in shopping centres.

“The livelihood and profitability of franchisees is of the utmost importance to RFG, and consequently it is focused on driving enhanced outcomes for franchisees,” the statement says.

Retail Food Group chairman Colin Archer (left) and managing director Andre Nell at the company's annual meeting where a review was announced.Retail Food Group chairman Colin Archer (left) and managing director Andre Nell at the company’s annual meeting where a review was announced. Photo: Dan Peled

It reiterated that it had appointed Deloitte to conduct a business-wide review of its franchise operations.

“In addition, RFG has recently completed an extensive engagement process with its franchisee community to better understand where it can improve franchisee outcomes and enhance service delivery,” RFG says in the statement.

It says “numerous” initiatives have already been implemented to drive improved franchisee outcomes. “In any franchise system, franchisor and franchisee outcomes are intrinsically linked,” it says.

“As a consequence, RFG is focused on ensuring it provides the right type of support, informed by direct feedback from franchisees and independent third-party experts, to ensure positive outcomes are achieved across its franchisee networks.”

RFG pre-empted Fairfax’s investigation on Thursday when it released an update on what it describes as its “business-wide review”. It also tried to reassure nervous investors by maintaining its forecast of 6 per cent “underlying” net profit growth for the 2018 financial year.

The company said the review, which will be conducted by accountants at Deloitte over two years, would focus on the  domestic franchise operations to ensure its business model was “appropriate for a retail market which remains challenging, particularly for shopping centre tenants”.

“RFG already has in place a number of proactive measures to inform, support and educate franchisees to ensure they are aware of their obligations as employers,” RFG said. “Deloitte is also evaluating the company’s complementary monitoring and supervision framework in relation to managing franchisees’ employee entitlement compliance.”

The problem for many franchises is that this has come all too late.

Desperation and hopelessness

Michael Fraser and Maddison Johnstone played a key role in Fairfax Media’s expose of rampant underpayment of workers at convenience store giant 7-Eleven in 2015 and also helped unveil similar problems at Domino’s earlier this year.

Michael Fraser and Maddison Johnstone visited 100 stores.Michael Fraser and Maddison Johnstone visited 100 stores. Photo:

They run an assistance and support business for disaffected franchisees called Franchise Redress and spent 30 days on the road from October 25 this year monitoring the RFG network of brands, visiting more than 100 stores in Victoria, NSW and Queensland.

In its report, titled RFG: The Zombie Brandchise​ Network, Franchise Redress said most of the franchisees they spoke to blamed RFG for the poor performance of their stores.

“In our investigations into other franchise models, we have never seen such desperation and hopelessness in large numbers. While conducting this investigation, five franchisees we encountered in a two-week period abandoned their stores. In the case of two stores, this happened right in front of us,” the report said.

Many of the stores they visited were for sale, most at a heavily discounted price to the purchase price or the price advertised.

“The stores had been on the market for a very long time – in some cases, over a year,” the report said.

“It is not uncommon for an RFG franchisee to say: ‘I have already lost hundreds of thousands of dollars, but if I can just walk away without having to continue paying the lease, I will be happy.’ ”

Franchises say RFG Group is built on their suffering.Franchises say RFG Group is built on their suffering. Illustration: Joe Benke

Franchisees told Fraser that RFG acquired a brand, decimated the franchisee support staff, renegotiated supplier deals and collected “kickbacks” to the detriment of the franchisee’s profit line, milked every possible cent out of the franchisees, before finally allowing the brand to die.

“The franchisees’ overall conclusion was that RFG was not in business with their franchise partners. Instead, they were solely in business with themselves,” the report said.

Of the Donut King franchisees Franchise Redress spoke to, most were averaging below $10,000 a week in sales, leaving next to no money to cover labour, rent, cost of goods sold and other expenses. The report quotes one Donut King franchisee saying her teenage staff members earned more a week than she did.

“Unfortunately, across the Donut King network, it was common to hear that franchisees were not able to draw an income, but still had to pay exorbitant franchise and marketing fees,” the report said.

Don’t buy RFG

A similar experience was echoed by independent investment advisers Barefoot Investor, headed by financial expert Scott Pape, which visited a number of franchised stores after RFG refused to discuss the business.

In a report published last December, Barefoot Investor said it spoke to some franchise owners under the guise of being “two dumbstruck blokes” thinking about buying a RFG franchise, to get their opinion. They found many franchisees were unhappy.

The report quoted one franchisee saying RFG was “a pack of arseholes”. The report said “the same things that make RFG such an attractive business for shareholders are what makes buying an RFG franchise a terrible investment for a store owner”.

The report concluded it wasn’t worth buying the stock.

“Having been on the road trip and broken bread (OK, donuts) with franchise store owners, I really don’t want to make money off their backs.”

The franchise sector is a $170 billion industry. Many people who buy into a franchise have little or no experience in business and buying into a franchise lowers the risk.

As Barefoot Investor says, it is marketed as a business in a box. However, franchise agreements can be complex and legalistic and difficult to understand. Sometimes agents don’t give them the full accounts until they have signed the agreement. Sometimes the financial accounts provided understated labour costs due to rampant wage fraud.

Royalties reaped

A critical element of the RFG business model is that is based on franchisees growing sales not profit. Head office takes a percentage, or royalty, from every sale, regardless of whether the store is generating a profit or loss. The royalties can be as high as 7 per cent, depending on the brand.


Franchisees also have to contribute to a marketing fund, which is also charged as a percentage of sales. This can vary between 2.5 per cent and 6 per cent, depending on the brand. Between royalties and marketing fund fees, this can account for up to 10 per cent or more of gross sales.

Alongside a store’s purchase price, which can be as high $700,000 there also is a franchise fee for the right to use the RFG brand, a training fee that can be more than $10,000 for a course run by RFG, and administration fees for the preparation of documents. There are rental costs, computer fees, project management fees and utilities. All up, it cost thousands, if not tens of thousands of dollars a year.

RFG also makes money from the raw food it sells to franchisees (it recently purchased Hudson Pacific, which supplies frozen foods, cheese and dairy). As a wholesaler and speciality coffee business it sells coffee beans to brands including Gloria Jean’s, Michel’s and Donut King.

It is not unusual for operators to sell to franchisees, but many complain they could buy a similar product much cheaper at the local supermarket. One current Gloria Jean’s franchisee, who declined to be named for fear of reprisals, says they pay $26 per kilo for Gloria Jean’s beans, while a kilo of coffee beans branded Gloria Jean’s was on special at Coles recently for $20.

Rebates claimed

The company also makes money from rebates, which are financial incentives provided by suppliers to retailers.


Industry sources estimate that RFG generates tens of millions a year in rebates from suppliers. RFG would not address this issue with Fairfax.

By taking such fat rebates RFG arguably is removing one of the key financial benefits of being part of a franchise system, which is buying power.

RFG also makes money from buying stores back for a fraction of their original sale price and then placing the same stores back on the market for hundreds of thousands of dollars.

Franchisees also have to pay one-off costs. Once again, this is not unusual, but there are questions about whether they are reasonable in the case of RFG.

In November, Gloria Jean’s franchisees were told they had to upgrade their hardware and software. They were told one terminal would cost an estimated $5224, plus a software licence of $1080 per year. Given the low levels of profitability this is a lot of money for many franchisees.

Gloria Jean’s franchisees have also been told that the brand will be getting a refresh, including a new logo, new smaller cups and stores refurbished.

A video sent to franchisees describes the strategy as: “masstige: prestige to the masses”.

It would appear prestige comes at a price. New menus, new retail skins will cost between $85,000 and $155,000 while new layouts will cost anywhere from $150,000 to $375,000. The video shared customer research of the new menu, based on 103 people surveyed. The aim is to have 350 stores by 2020 making 50 million cups.

Gloria Jeans is embarking on a rebranding.Gloria Jeans is embarking on a rebranding. Photo: James Brickwood

At its height Gloria Jean’s had 500 stores and served 64 million cups, but now has only 300 stores and sells 32 million cups, according to the video.

Ex-franchisee Donna Kilpatrick became part of a group of rebellious franchisees in 2015 that believed they were being oppressed and treated in an unfair manner. They raised concerns that the franchisor RFG had breached its obligation under the Franchising Code of Conduct to act in good faith.

Kilpatrick left in late 2015 after failing to sell the business.

“The impact on my life has been incalculable,” Kilpatrick says.

“I have separated from my husband … I worked 12 or more hours a day, seven days a week, for many years and walked away from a business I paid $270,000 for with $35,000. I still have a mortgage on my house. I signed up to work hard and was willing to do that. However, to work hard for no reward is soul destroying.”

She likens an RFG franchise to a financial trap. Her agreement was up for renewal and she could not afford to pay it, or pay the required refurbishment costs. She is one of many who have been forced to move away.

Most RFG franchise agreements expire every five years. Each time the agreement is renewed or sold, RFG collects a franchise fee.

Some franchise renewal fees cost up to $50,000 depending on the brand. Across a network of 2500 stores, this equates to tens of millions of dollars collected in extra profit.

With so many franchisees baling, RFG has started offering deals and loans to entice them to stay, as too many stores for sale depresses the valuation.

Sharing growth?

A telltale sign that franchisees are being squeezed is to look at the network sales generated by franchisees and compare it with the operating earnings (also know as earnings before interest, tax, depreciation and amortisation) generated by RFG, which is rising.

In its bakery brands, RFG has actually made more money, with EBITDA per outlet has increasing from $45,600 in 2014 to $54,100 in 2017. Over a similar period the number of stores, particularly in Michel’s, has fallen, which suggests a squeeze.

Network sales generated by franchisees at Michel’s collapsed from $170 million in 2013 to $120 million in 2017, yet EBITDA generated by RFG from these franchisees went up from $15.5 million to $15.7 million. One explanation would be that RFG is taking a larger piece of the pie. RFG refused to comment.

Network sales at Donut King fell from $166 million to $160 million between 2013 and 2017. However, EBITDA generated by these same franchisee fees and other fees rose materially from $12.7 million to $17.4 million over the same period.

It seems unlikely this trend can continue indefinitely and cracks are appearing in RFG itself. These include the amount of receivables (outstanding invoices and money owed by franchisees) of 90 days or more, which now represents 16 per cent of pre-tax profit.

Receivables rose in 2017 by 109 per cent and sales grew only 49 per cent, which suggests the company has a higher proportion of sales uncollected and outstanding at balance date.  (Part of the increase in receivables relative to sales is due to a change in business mix from Hudson Pacific, which they bought in FY17.)

There also has been a significant lift in advances to franchisees to fund store acquisitions and refurbishments. The vendor finance balance was restated to $6.8 million in 2015, $11 million in 2016 and $16 million for 2017.

The UBS report and the restatement of its accounts raised concerns about transparency. The restatement was partly due to a retrospective write-down of six brands – Pizza Capers, The Coffee Guy, Esquires, Big Dad’s Pies, DCM Coffee & Donuts and bb’s Cafe – most of which have been absorbed into other brands.

The restatement was also due to a change in the way RFG must now treat expenditure previously charged to marketing funds (but not collected).

It was revealed in its annual accounts that RFG was never justified spending money out of the Michel’s marketing funding on supply chain efficiencies that it was never justified spending. It was booked as a receivable and passed on as a cost to franchisees. When franchisees couldn’t pay it, they wrote it off.

Some industry sources suggest that if RFG had applied the new accounting policies in previous periods, profits announced to shareholders would have been lower.

Michael Sherlock is surprised it has taken this long for problems to emerge.

“If you put the pressure on and squeeze, squeeze, squeeze, then what’s left? People have to survive, you know?”

Quality falls

Paul Rubini’s family, including his sister and brother-in-law, bought a bb’s Cafe in Robina on the Gold Coast from RFG in September 2006 for $490,000. They couldn’t survive.

In 2010 they spent $150,000 refurbishing the store, then another $142,000 in 2014 when told to convert it into a Michel’s Patisserie. “Our hands went underwater and then the head as a result of the refurbishments,” he said.

But customer complaints started ballooning as they had to buy Michel’s products, which were delivered frozen and required decorating.

Rubini isn’t the only Michel’s franchisee complaining about the quality of products they have to sell. Many complain about broken biscuits, battered cakes and questionable icing.

Photos sighted by Fairfax include a chocolate cake that looked like mould spores were growing off it, while another had a human hair stuck in the cake.

Another shows a child’s birthday cake that was broken and smeared over the box as well as biscuits in the shape of a gingerbread man that were broken in half.

For Rubini, the store became insolvent and they closed on July 6 this year, owing $350,000 in bank debts. “We couldn’t catch up and we couldn’t sell it because it was losing so much money.”

RFG recently posted the store for sale for $300,000, plus stock at value – not a bad earner for RFG given the family walked away.

The family hopes there isn’t a sucker big enough to buy the store and all the misery that comes with it.

Age-friendly workplaces could lead to a healthier later life – AgedCareGuide

An Australian Aged Care Website

Longer careers and better health later in life could be on the cards for older Australians if workplaces were more age-friendly and promoted healthy lifestyles to their employees, a new study from Australian National University (ANU) in Canberra has found.

People who have a sense of control over their environment and life changes have better wellbeing (Source: Shutterstock)

The study, run in collaboration with the ARC Centre of Excellence in Population Ageing Research and the Centre for Research on Ageing Health and Wellbeing (CRAHW) was conducted over the course of a year and used workforce transition data from a 10 year period (2001-2011) from the national HILDA survey of 1,700 people aged 45-64.

Results from the surveys allowed assessments on yearly changes in health, wellbeing and welfare dependency in relation with workforce transitions from paid work to unpaid work or early retirement, when compared to others who were staying in paid work.

Lead researcher from the Centre for Research on Ageing, Health and Wellbeing within the ANU Research School of Population Health Dr Cathy Gong says the study revealed that health was the ‘primary and crucial factor’ underlying both voluntary and involuntary exits from paid work at mature ages.

“People who left paid work involuntarily experienced significant decreases in their satisfaction with their finances, health and life just in general,” Dr Gong says.
“They were also more likely to be psychologically distressed and welfare dependent.”

Dr Gong adds that people who had a sense of control over their environment and life changes had better wellbeing.

“People who are forced to retire early due to job loss or their own health report significant declines in their income and wellbeing in retirement,” she explains.

Co-researcher Professor Hal Kendig from CRAHW says the findings suggest that employment policies and practices need to change to improve mature aged workers’ control of their health and work environment.

“Age-friendly workplaces, work flexibility, retraining and promotion of healthy lifestyles are vital to address the major causes of not working, enable people to have longer careers and enhance wellbeing later in life,” he says.

“Voluntary retirement with control over the timing and manner of retirement had positive impacts on retirees’ psychological and social wellbeing.

“Enabling mature aged workers to work longer offers benefits for both individual wellbeing and government budgets.”

With anticipated workforce shortages, increased welfare expenditure and pressure on fiscal sustainability projected over the coming years due to Australia’s rapidly ageing population, the researchers say looking after older workers could enable to older population to work longer, contributing to meeting the challenges ahead.

Though Australia has legislation to address age discrimination within employment, Dr Gong says there are still ways that employers and the government can aid older Australians to continue working longer and more happily.

“A mature aged workers’ control of their health and work environment is found to be able to enhance wellbeing later in life, promoting health over the life span and age-friendly workplaces are fundamental to encouraging mature aged workers to work longer and to return to paid work after workforce transitions,” Dr Gong explains.

“Employers can enhance control, flexibility, workplace health promotion, and re-training among valued aged workers… governments can build human and social capital through health promotion and education across the life course.

“[This] is the most constructive way of enabling ageing people themselves to contribute to addressing the challenges of an ageing Australia.”

The researchers add that more fundamental structural change in workplaces requires attention to underlying ageist attitudes, and creating age-friendly workplaces with a good combination of workers at different ages is vital.

The full study is available to view online via the Australian Journal on Ageing.
© DPS Publishing Pty Ltd

Job-killers: bank workers at the forefront of massive disruption – SMH

Ruth Williams
SMH Analysis
3 November 2017

Automation and fin tech loom as the biggest job killers in the finance sector. Photo: Michael Ciaglo

In the eighties it was automatic teller machines. In the nineties it was mass branch closures. In the naughties, it was offshoring. Now, automation and fintech loom as the great finance sector job-killers, with fears that more jobs could follow the 6000 in cuts announced by National Australia Bank on Thursday.

For bank employees, it is a time of “massive upheaval and change” in the words of the Finance Sector Union, which says it has real concerns that more large-scale job losses are coming. NAB’s 6000 job cuts, to come over the next three years, amount to about 18 per cent of its full-time equivalent workforce – the most dramatic change to employee numbers publicly announced by a major bank in recent years

National Australia Bank announces it will cut 6000 jobs over the next three years, while hiring 2000 new people with digital skills.

“The finance industry is really at a crossroads,” says FSU national secretary Julia Angrisano, who wants more details of the bank’s career transition program, to be called “The Bridge”, and the 2000 new jobs NAB says it will create as it “reshapes” its workforce with a focus on more automated processes.

NAB chief executive Andrew Thorburn says that, where possible, the bank will retrain staff with the “aptitude and commitment” to do so, and expects that some of the job losses will come from natural attrition.

For the rest of the economy, it’s a reminder that few sectors, income brackets or skill levels will be immune from the changes brought on by automation and digital disruption. Economist Saul Eslake points to a widely-quoted Oxford University study suggesting that 47 per cent of US employees are working in jobs that could be done by computers or algorithms within between 10 and 20 years, with the impact to be felt in both high and low income jobs. In Australia, a 2015 study from the Office of the Chief Economist found that 44 per cent of Australian jobs were highly susceptible to automation.

But it is bank workers who are at the frontline of this change; the 2015 study gave bank workers the second-highest automation score of any occupation, lagging only behind telemarketers.

To help workers cope with this period of “intense digital disruption”, the FSU has called for a sector-wide industry plan with contributions from the banks, the union and the government, and a skills fund for workers.

“We are at the point where we could leave the employees behind,” Angrisano says. “The way we treat staff during this period will reflect on the industry… we need to have the industry step up and manage this in a way they haven’t managed it previously.”

There is cause for hope for affected workers. Eslake says that the job losses resulting from previous technological upheavals have quickly been “more than offset” by new jobs and productivity gains created by that same technology.

His optimism is echoed by David Tuffley, senior lecturer in applied ethics and sociotechnical studies at Griffith University. He says while the 6000 figure announced by NAB seems “alarmingly” high, “the trend that we have seen with other technology is that the technology itself generates more and more employment in its own right… we don’t know what these new jobs are going to be, but we do know that they will come”.

Eslake suggests there may be a role for the government to subsidise the retraining of workers who lose their jobs to automation, and he also calls for a boost to income support for people who lose their jobs.

But he says we also need to rethink why some jobs – such as those in manufacturing – are viewed as inherently more “noble” and worthy of intervention than those in the services sector. “Nine hundred people lost their jobs at Holden and there’s an enormous amount of wailing and gnashing of teeth compared to 6000 jobs at the bank,” he says.

We are at the point where we could leave the employees behind. – Julia Angrisano, Finance Sector Union

“We seem to think that manufacturing jobs are far more worthy of being saved than jobs in services.”


More than 80 per cent of us won’t be retiring comfortably –

Ben Graham
October 12, 2017

When it comes to retirement, 60s are the new 50s

ONLY 19 per cent of us will retire comfortably and Gen X Aussies will have to save up to $4 million dollars to enjoy their golden years, according to new research.

This means a whopping 81.3 per cent of Australians could fall short when it comes to being able to afford a comfortable retirement, according to the stats from Griffith University and leading financial education service, No More Practice Education.

The alarming forecasts show that if you’re born after 1984, you are likely to need between $2.09 — $3.98 million dollars for a comfortable self-funded retirement in 26 years’ time.

According to SuperGuide, a couple expect to enjoy a “comfortable” life in retirement today if they can generate an annual income of $59,971 by retiring with a superannuation lump sum of at least $615,000.

Leader and Founder of No More Practice Education Vanessa Stoykov said the age pension today covers only a third of what is considered a “comfortable lifestyle” in retirement.

Millenials will have to save a lot more than their parents to retire comfortably.

Millenials will have to save a lot more than their parents to retire comfortably.Source:News Corp Australia

“Although these numbers highlight the ‘worst case’ situation, preparing for this low growth scenario is essential because it’s been occurring in countries like Japan for the past two decades, so there is nothing to say it won’t happen to us too,” Ms Stoykov said.

Luckily, an enormous $3.5 trillion dollars is expected to be passed on from Australian Baby Boomers to their children over the next 20 years, according to McCrindle Research.

From this, 75 per cent of all Gen X and Y with surviving parents will inherit $110,000, and if invested wisely, these funds could set up their future.

However, without smart investment, this would create a significant event that’s being dubbed “the economic tsunami”.

“The expected inheritance figure is a huge amount of money that Gen X and Y is predicted to receive, however the unfortunate truth is that Australians simply don’t know how to invest it,” said Ms Stoykov.

“Through decades of experience in the wealth creation space I’ve learnt that to truly grow long-term wealth, people need to ‘unlearn’ everything they think they know about money.

Those retiring now will need a superannuation lump sum of at least $615,000.

Those retiring now will need a superannuation lump sum of at least $615,000.Source:Supplied

“I can wholeheartedly relate to why people get overwhelmed when it comes to thinking about their retirement funds. For most people retirement seems like forever, or not something they

are going to be able to do.

“The good news is that reinvention is the new retirement, and it’s entirely possible for Generation X and Y to achieve their goals.

“Although it’s daunting, the reality is that for a comfortable retirement each person in today’s terms will require $1.11 million (at 5 per cent earnings rate with no age pension), or $910,000 (at 7 per cent).

“This is no easy feat, and although it’s entirely possible to achieve, it takes time, so people have to start now.”

Diversity is a massive problem in Silicon Valley – meet the fund backing minority entrepreneurs – BusinessInsider

Diversity is one of the most contentious words in the tech industry right now.

Consider that 2017 alone has involved:

All of this happened in the first six months of 2017. And yet engineers and venture capitalists in the tech industry continue to argue against the value of diversity, either overtly or quietly.

After a summer of scandal around harassment in tech, former Googler James Damore argued against Google’s current diversity practices, and was blasted for his “scientific” explanations for why there are fewer women in tech. Amid massive industry outcry, he was supported by several high-profile VCs and entrepreneurs, such as Y Combinator cofounder Paul Graham, and Thiel Capital managing director Eric Weinstein.

Clearly, there’s still work to do.

The good news is some companies see diversity as good business

Comcast Ventures, the venture arm of US telco Comcast, in 2012 set up a fund specifically targeted at minority entrepreneurs. The Catalyst Fund has $US20 million (£15 million) under management to invest, and new leadership as of December in Kai Bond, formerly general manager of Samsung Accelerator.

It’s been running for five years, mostly focusing on building dealflow in that time. Now Bond wants to rebuild Catalyst’s brand as the go-to place for minority entrepreneurs — mostly in the US, but Europe too.

Catalyst has started writing bigger checks of up to $US1 million, he said, and will forge partnerships with third parties to support portfolio companies. Portfolio startups include fashion brand Cuyana, and customer messaging service LiveNinja, which was acquired by VoIP firm Net2Phone in January.

“We’re trying to rebuild the brand and figure out exactly where we can add value,” Bond told Business Insider.

Catalyst has just struck a partnership with Sylvain Labs, a brand consultancy whose services are pricier than what startups could normally afford.

Bond added there was a “clear problem” with lack of venture capital dollar flow to female and minority founders. “There’s no network support either,” he added.

In June 2015, CB Insights found that just 1% of funded entrepreneurs in the US were black, despite black people representing 11% of the US population. The figure is better for Asian entrepreneurs, who represent 12% of funded founders in the US but made up 4% of the population.


Bond thinks Catalyst might be able to help with the network problem through its partnerships. There are several disadvantages to not having a network. It can mean there’s no supportive network of peers to bounce ideas with, but also no network of older business mentors to advise you when the going gets tough.

“The plan is to help startups in two ways: to think about their brand and where it fits in the world, and the strategic role of brand in that early stage when you’re trying to educate people,” said Sylvain Labs founder Alain Sylvain.

The consultancy provides its services for free, but takes the opportunity to find startups to potentially invest in down the line.

“This is not about charity,” Sylvain added. “So many entrepreneurs are groomed for the ideal opportunities to start a business — parents who have supported them, elite educations, fraternities.”

There’ll be other Catalyst partners in due course, Bond said.

Catalyst isn’t the only fund trying to promote minority entrepreneurs. Bond pointed to 500 Startups and Y Combinator as “overindexing” in minority and women founders — even as their programme founders were accused of harassment.

But for Sylvain, there’s nothing so tightly focused on providing services. “There’s never been anything like this focused on this audience or entrepreneur. It really feels like something fresh and new.”

EveryAGE Counts – The Benevolent Society

EveryAGE Counts

EveryAGE Counts

The Benevolent Society

Ageism is discrimination or unfair treatment based on a person’s age. It can impact on someone’s confidence, job prospects, financial situation, health and their quality of life.  Like racism and sexism, ageism serves a social and economic purpose of legitimising and sustaining inequalities between groups – in this case between people of different ages.

The Benevolent Society is working with our partners and supporters to research the attitudes and beliefs that drive ageism, and build a campaign based on this understanding to address ageism in Australia.

The EveryAGE Counts research into the drivers of ageism can be downloaded here.

When age and life experience become a barrier to getting a job – SMH

Sydney Morning Herald
September 29 2017
Anna Patty

Libby Low had planned to return to work soon after having her first baby, but after the child was diagnosed with a rare genetic condition she ended up staying out of the workforce for five years.

When she started looking for a job in January at the age of 40, friends told her the best she could hope for was a job in administration, despite her many years of experience in management.


Libby Low took five years out of the workforce to look after a child with special needs. Photo: Christopher Pearce

“I had low expectations,” she said. “It is absolutely intimidating. When I started thinking about what am I going to do, I didn’t know where to start.

“My head was in a different place for five years and I had no professional confidence.”

While looking for jobs, Ms Low stumbled on a new recruitment program that was targeting people who had been out of work for two years or more.

Her application for the job was successful and she started work four days a week as a consulting manager for Deloitte in July.

“It’s been great. It was a lot about restoring your confidence,” Ms Low said.

Ms Low will find out in mid-November whether she will get a permanent role with Deloitte after completing a 20-week program

Deloitte Australia said it introduced the new Return To Work Program in response to the under-representation of women in senior ranks.

A spokesman said it was open to men and women, but aimed to help women who have taken a break transition back into the workplace.

“The program is part of our wider strategy to improve diversity at all levels of the business and forms part of our commitment to being an inclusive employer,” he said.

While Deloitte said it was working towards increasing diversity, a new report released by the Australian Centre for Leadership for Women found that many organisations have “a mono culture valuing sameness, not difference” and marginalised women because of their caring roles.

The Unique Leadership of Minority Women Report found that being a woman from a minority group, which included older women, was a major barrier to entering senior leadership positions.

“A resounding theme was that women from minority groups have diverse experiences because of their unique contexts, experiences of diversity and discrimination which shaped a unique style of leadership that was more people focused, resilient, collaborative, interpersonal, empathetic, flexible, creative, lateral and innovative in their approaches to leadership, problem solving and developing business solutions,” the report said.

The director of the Australian Centre for Leadership for Women, Dr Diann Rodgers-Healey, who authored the national study of women mostly aged between 36 to 55, said not being caucasian, able-bodied, heterosexual, attending private schools and prestigious universities created significant disadvantages.

“With minorities working hard to achieve and prove themselves amongst those who are mostly Anglo-Saxon, despite doing the work, it was highlighted that they are not valued and remunerated as they should be, but relegated to be the “back staff worker”.

The report said women’s maturity, life experience and professional experience were valued in the community sector, “but in the corporate sector, prejudice to age, lack of recognition for their knowledge and experience have excluded older women from opportunities. Here they have to prove themselves by working harder and being more assertive”.

Aloma Fennell, national president of Older Women’s Network said she was concerned that older women were now being recognised as a “minority group” despite offering a lot of value in terms of ability and experience.

“Irrespective of what we have achieved or contributed, we are [a] very age-focused society,” she said.

“Women, particularly over the age of 55, are thought of as too old and undervalued. By the age of 60, you are completely invisible.

“But one in 60 people today are in the over-60 bracket and people will need to work until the pension age of 70. What are they going to do for 15 years?”.


  • MartySydney,

    It would have been sensible to have included the name of the recruitment program which helped out!!

  • GianSydney,

    29 people reading and no comment yet. Doesn’t look like this issue is getting much traction which is precisely why this article is written.

  • incompatible

    After 10 years of “retirement”, I’d be tempted to start working again, since life becomes stale if you do the same things endlessly. I’m not sure that the economy has any demand for 50+-year-old software developers though. Moving to a large city to look for work would be expensive.

  • ZennKL,

    Middle aged men are marginalised in employment. As a 54 yo law graduate I have made countless applications for 2 interviews. The first yielded 2 weeks work in which I did a personal matter for the principal, and the second I did not hear from subsequent to the interview. It reflects poorly on lawyers and the NSW Public Service that they do no have the courtesy to inform unsuccessful applicants or offer them feedback.

  • gmannsw,

    What about about white middle aged men ? Is there a program the for them ?

  • Mere Male

    It also helps with getting a job to be female.

  • JOHNLWamberal ,

    Ageist stereotyping is just one factor, once you are out of The workforce you find that office software has gone through several iterations, the office is now “hot desking” and “agile”. All those not used to such changes will need to be pretty adaptable to navigate them. Even if they are, they still need to convince some 30 year old they can do it.

  • Fergus

    Amazed that such women struggle to get back into the workplace. Such people usually have such critical skills as emotional intelligence, empathy and attention to detail. Unlike millenials who simply see employment as simply the next step to the next job, such people understand ideas such as pride in their work and a capacity to value the aspirations of the outfit they work for. And for a range of reasons they need to money.
    In our experience they are less likely to be addicted to social media,they know stuff and understand that solutions doesn’t always mean “just goggle it.” Those organisations who sideline these people have a lot to learn about HR.

    • Generations Plus

      Really agree with this comment. We love the old school values in the work force and are thrilled to be employers of people in their 20s through to 60s. It’s a great mix and keeps it all real for all generations to be represented and we all learn from each other. Our employee in his 60s brings massive experience and an alignment and understanding of values to the table which has been invaluable for our business. We can’t believe such people are passed over for employment. We have had good experiences with work ethic from people across all generations but also bad experiences. One observation I would make is that we have had to train younger staff to trust their own judgement rather than defer to ‘groupthink’. It seems technology has robbed some of their ability to be individuals.

  • Susan

    I wish there was a program like this when I returned to the workforce 3 years ago. I went from a managerial position in a corporate to an administrator in a community services organisation. I don’t think it’s right to say that women’s experience is valued in the community services sector – the main reason women are ‘welcomed’ into the community sector is because we are generally more willing to put up with the terrible pay.

  • Rosie

    To answer the question asked in the final line of this article – I sit at home doing nothing, living off my superannuation which will be all gone by the time I get to pension age because at age 59 I haven’t been able to get work for the past 6 years. I’ve had two interviews out of all the applications I’ve sent off. Up until now I had never been unemployed since I started work at aged 15 in admin/clerical positions. I’ve been told straight out “you’ve got all the skills & experience but we want someone younger”. I’ve given up now. Heaven help the young ones out there who are unemployed too.

  • Older Sydney,

    How amazing is this to see this issue actually getting some air time. And what an amazing initiative from Deloitte. I’d hit 50 but seriously wanted to get back into full time, good, interesting and challenging work, like I’d left at 35. It took a series of incremental contract positions, but eventually I got me back in. It never occurred to me to give up.

  • Vicki

    Even harder your surname can easily identified you as a minority group

Ageism to be tackled in bid to change negative perceptions – SMH

Sydney Morning Herald
September 28 2017
Rachel Browne, William McInnes


Executive director of the Benevolent Society Kirsty Nowlan said the research, The Drivers of Ageism, showed a mismatch between perceptions about ageing and reality.

“Views about ageing have a preponderance of negativity,” she said.

“People believe that ageing is a process of inevitable decline. The reality is a lot of the fear about ageing is based on a set of myths.

“Ninety per cent of people over 65 rate their health as excellent. More than 90 per cent of older people live independently, not in a nursing home.

“There is a real dissonance between people’s beliefs and what is actually happening.”

The research found that ageist attitudes were most prevalent around employment with one-third of respondents saying employers should be able to force older workers into reduced roles, one-quarter saying bosses would get better value out of training younger workers than older ones and one-fifth saying younger people should get priority over older people for promotion.

Alan Williams, 62, is attempting to return to the workforce after nine years of unemployment. After his wife was diagnosed with dementia, he became her full-time carer. He said that now he is willing to return to the workforce, his age appears to be a hindrance.

“You don’t get told officially but I’ve gone for 22 jobs this month and only got two interviews,” he said. “A few others had strict instructions saying that I currently have to be employed”

Mr Williams had previously been self-employed, running a variety of successful businesses. He said that even applying for jobs at his age can be difficult, with changing technology and changing attitudes.

“I rang a recruiter and said that I was putting in an online application and that I couldn’t find anywhere to put in a cover letter. She said she never reads them anyway.

“Coming back in, technology has changed. I expected that but a lot of the terminology is different too.”

Mr Williams said many of his friends had been in a similar situation and had simply given up on looking for work at their age.

“Friends in my age group, over 50, mostly are just doing volunteering work. They applied for several jobs but just didn’t get any.

“I would like a bit more in my superannuation though. I’m happy to work until I’m 75.

“I’m even starting to look overseas so I can get back into the workforce. At least then I’m actually back in the workforce.”

The research, which involved 1400 participants of varying ages, exposed a number of other negative stereotypes about ageing.

However, it did not state an age at which a person becomes “old”.

Almost 60 per cent of respondents believed mental and physical deterioration were inevitable, 43 per cent associated old age with death and 39 per cent said growing older meant losing independence.

Negative attitudes about the cost associated with ageing also came out in the survey with 19 per cent of respondents saying the amount of money spent on healthcare for the elderly should be rationed.

People aged over 65 who took part in the survey had experienced ageism with 57 per cent saying they’d been told a joke about older people, 38 per cent reporting being patronised and 37 per cent being ignored.

Almost a third of older people said they had been turned down for a job due to their age and 14 per cent said they had been turned down for a promotion.

There were some positive perceptions with 73 per cent of people saying older people had a lot to offer younger people, 65 per cent reporting older people have a strong work ethic and 65 per cent believing older people are responsible.

Almost 80 per cent of respondents agreed that ageism was an important issue.

Australians aged 65 and over comprise about 15 per cent of the population, a proportion set to increase to 23 per cent by 2064, according to data from the Australian Institute of Health and Welfare.

Dr Nowlan said the campaign would work with governments and the private sector over the next 10 to 15 years to address ageism, a form of discrimination that is likely to affect everyone.

As part of the advocacy, the coalition will lobby for a federal minister to represent older Australians.

“We view this as a long-term campaign of the same scope and scale as the NDIS,” she said.

“This campaign is a 10- to 15-year project aimed at shifting views about growing older.

“We have been given this gift of longer, healthier life and we really ought to make the most of it.”