Redundancy Remedy

John Stanton, Franchise Recruitment Manager, Cafe2U

This article appears in the January/February 2014 issue of Business Franchise Australia & New Zealand


Mature age workers use redundancy payouts to establish franchise careers

According to the Labour Mobility Survey released by the ABS in August of 2013, a staggering 345,800 people found themselves out of a job due to retrenchment in the year leading up to February 2013, suggesting that redundancy is more prevalent than ever in Australia.

While high profile cases such as the closure of Ford Australia‘s Victorian plants grab headlines, redundancy continues to leave older workers on the employment scrapheap in a raft of industries.

For mature age workers (workers who are aged 45 years and over) redundancy can be a particularly daunting prospect to face, as various reports have suggested that they are often excluded from the recruitment process and not even considered for  certain positions at all.

As the Australasian Franchise Recruitment Manager for Cafe2U since 2010 I have witnessed this trend first-hand, and over the past three years it is a trend I have seen become more and more prevalent. Not only do we encounter a lot of mature aged  workers at Cafe2U (currently over 50 per cent of our Franchise Partners fall into the mature age category) but we also see a lot of mature age workers who have found their positions have been made redundant enquiring about franchising with us. Approximately 15 per cent of our current Franchise Partners found their previous position had been made redundant or were experiencing uncertainty in their employment prior to joining the Cafe2U franchise.

Facing redundancy in twilight years

Of those mature aged individuals who have found themselves facing redundancy, a large percentage claim to have come up against considerable barriers trying to gain employment in their area of expertise, as a result of their age. Others have also felt
uncomfortable taking on another role or a short-term contract, for fear of going through the retrenchment cycle again.

These individuals are looking for ways to take control of their futures and are using their redundancy packages in a different way; not to sustain them while they seek to be re-employed in the industry or as term deposit investments, but as the key to  making a change in their lives and financing an entirely new career path. Low entry cost, owner-operator franchise operations, such as Cafe2U provide a great solution for those who find themself in this predicament.

This certainly rings true for owner of Cafe2U in Archerfield, Queensland David Ovens.

David worked as a Facilities Co-ordinator with a major Australian company for four years before being told his position was going to be made redundant. This was not the first time David had faced redundancy either. Prior to assuming his last position, David had worked for a multinational organisation for 30 years before being informed his position was being made redundant. At age 59, David said he was very disheartened to find himself in this position again and extremely concerned
about his job prospects.

“In the beginning, I sent off countless job applications and got nowhere. I could not even manage to secure an interview,” David admitted to me recently.

“I started exploring the world of franchising with Cafe2U and found that not only did they not discriminate against older workers, but they offered great training and support systems, as well as an exceptional level of professionalism. I used my redundancy package to fund my new career with Cafe2U and I am so glad I did - discovering this path was a godsend.”

The strain of redundancy

Redundancy places a long-term career employee under a unique set of pressures. There is a long line of workers who have dedicated themselves to one career discipline. When their career is terminated through redundancy, not only are there
dwindling opportunities to get re-employed in their industry, but there is also a void in terms of the entrepreneurial traits needed to make a small business work from a start-up phase.

These pressures escalate if they are older because it can be a big ask developing these skills later in life. This is why we are getting a consistent line of enquiries among people who have experienced these circumstances.

The benefit of buying into a franchise is that they provide you with the necessary training and support that you need to run your own business successfully. It could take you many years of trial and error running a small business on your own to obtain  the knowledge to do it successfully. For people who don’t have years to spend retraining, franchising is a wonderful opportunity to have access to business models that have been proven to work. Cafe2U provides training support for workers to retrain as small business operators with its Acceleration Package – a four week training program that not only equips workers with the training to be a top quality barista but also the skills to run their own business, including assistance with cold calling and
sourcing new business.

Embracing lifestyle change

For a lot of our operators, including those that are mature aged, the decision to run a mobile coffee franchise has a lot to do with wanting an exciting change of lifestyle. As well as training, support and security, Cafe2U offers a flexible work/life balance with operators typically starting and finishing early. The lifestyle aspect of a career with Cafe2U is a big drawcard for workers who are coming up to their twilight years and might not want to work at the same pace that they once did. Or they  are simply seeking a change.

This is true for another of our Franchise Partners Gary Cooke, who always had in the back of his mind that he would like to run his own mobile coffee franchise after admiring the work and lifestyle of mobile coffee operators at his children’s sporting matches.

At age 55 and after 29 years in the coal mining industry, Gary found that his position was being made redundant.

Instead of treating his new situation and age as a setback, Gary seized the opportunity to change his lifestyle and pursue a new career as a mobile coffee franchise operator with Cafe2U, which was also largely funded by his redundancy package.

“For me redundancy meant the opportunity for a radical lifestyle change. After years in the same industry I jumped at the opportunity to reinvent my career and work at a different pace. With Cafe2U I am able to run my own business, be my own boss and pick my own hours, which means I am in control of my future – a change that was definitely overdue,” Gary said.

“Now that I have been operating my van for a couple of years it has become more than that for me. I have really come to enjoy the satisfaction that comes with bringing people their coffee each morning. It makes them happy and gives me a great sense of self worth!”

Franchising vs. Start-Ups

The benefits of franchising, as opposed to going it alone with a small business start-up is that you have the brand recognition of an established business. You have marketing support through the master franchisor, support in terms of training and development of your individual franchise and most importantly, proven systems to follow. It is the perfect bridge between being your own boss without having to conjure a business model and customer base from nothing.

For older workers who may only be a few years off retirement, the franchise model offers the perfect transition. They are able to spend the last few years of their working lives in employment, running their own businesses and generating an income  with the support of a highly experienced team.

The Cafe2U Acceleration Package means that new Franchise Partners can be retrained and in operation in just four weeks.

The return on investment in a Cafe2U franchise also far outweighs what you could expect from a term deposit-style investment. Running your own business rather than working as an employee can open up many taxation advantages, so in the long  run it is a much more worthwhile investment for workers who have been made redundant.

If they are smart about their operation, they may even be able to develop the business to the point that they oversee multiple vans and hire an employee to operate them. This allows them to be receiving a ‘passive’ income whilst they make the  transition in to full retirement.

David Ovens certainly agrees that franchising was the way to go for him after redundancy.

“Cafe2U has given me a second lease on life and a reason to get out of bed in the morning – I am really enjoying it.”

John is the Australasian Franchise Recruitment Manager for international mobile coffee franchise, Cafe2U, the proud pioneers of the mobile cafe industry. John manages the recruitment process for new franchisees entering the Cafe2U system, oversees the re-sale process for existing Franchise Partners and also assists franchisees with expansion into multi-unit operations.

John’s work at Cafe2U has seen the franchise system increase to 158 franchisees across Australia and New Zealand.

For further information contact John at:
Phone: 1300 223 328