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#335104 - 01/31/08 07:49 PM Re: Contracts made by schools [Re: tkd_high_green]
fileboy2002 Offline
Enthusiast

Registered: 11/13/05
Posts: 999
Loc: Chicago, IL
The difference is that you and the martial arts instructor do not approach the contract as equals. A martial arts instructor has FAR more power to decieve a prospective student than a prospective student has to detect potential deception.

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#335105 - 01/31/08 10:34 PM Re: Contracts made by schools [Re: fileboy2002]
Itami Offline
Newbie

Registered: 01/20/08
Posts: 14
We use contracts at my school and we 'sell' them to a 3rd party. While we work with our students a lot more than most (if they're injured we're credit them the amount of time they were out for no extra, if they're financially in trouble we'll freeze their account or find a price that's reasonable [or in same cases, like kids that don't have a choice, we'll let them take for free if they do some cleaning for us everytime they come in]), it can still be a problem when they cancel.

Most 3rd party collectors charge schools if a student breaks a contract. The standard I am aware of is 2 months + 10% of the remaining balance. For us, if they move more than X miles, have an injury or health condition w/ doctor's note, etc. they get out no problem and we'll help them.

While I don't like what happened in this situation, it's still something people have to be aware of when signing contracts. It does help business to have contracts and a 3rd party collectors (we have around 150 contracts with several hundred students, we'd have to hire someone full time just to keep track of money and chase down delinquency!), but repeat customers will increase your revenue and school performance more than snatching people like this.

And 2 years for a first contract? That's crazy.

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#335106 - 02/01/08 01:10 AM Re: Contracts made by schools [Re: Itami]
Sorin Offline
Member

Registered: 08/27/05
Posts: 131
Loc: Oxford, MS
Contracts can be used to help earn money and collect money from students, especially in larger schools such as yours. It can even help keep some students coming to class, since they will have to pay whether they go or not. One problem with them though, is that most people don't know what they're looking at. This is when quite a few one sided contracts get issued. They see this nice teacher with all these stripes on his black belt who (in their minds) could kill everyone in the room in an instant. In my experience, most people who see the black belt, typically seem to trust you a great deal more. This would cause them to trust what the teacher says and not pay as much attention to the fine print. They may even agree if the teacher says: "Little [censored]/Jane should join the super flying spider monkey black belt club!! It's only an extra $300 a month, and they get a cool patch and an extra hour of intense training!! Most people don't know what's good or bad. What's a good price to pay? What about all of the other testing fees, etc..? God knows there are enough of those questions on these boards from newbies. It's a shame people don't do a little bit more research before making a decision.

Sorin

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#335107 - 02/01/08 11:03 AM Re: Contracts made by schools [Re: Itami]
MattJ Offline
Free Rhinoplasty!
Prolific

Registered: 11/25/04
Posts: 15634
Loc: York PA. USA
Quote by Itami -

Quote:

repeat customers will increase your revenue and school performance more than snatching people like this.




Well said! Word of mouth is BY FAR the best kind of "sales technique".
_________________________
"In case you ever wondered what it's like to be knocked out, it's like waking up from a nightmare only to discover it wasn't a dream." -Forrest Griffin

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#335108 - 02/01/08 03:04 PM Re: Contracts made by schools [Re: Itami]
cxt Offline
Professional Poster

Registered: 09/11/03
Posts: 5823
Loc: USA
Itami

Sounds like you guys are providing good customer service----sadly you can't count on the next guy doing the same.

Quick question--if the contract states that if one "move more than X miles, have an injury etc"

Then why would you need to "help" them?"

If those are listed contractual obligations then no "help" should be needed....it should be a simple matter of cancelation and proof of move etc.

What happens if someone gets injured and rather than have their contract "frozen" they just have no interest in training with the person/s that hurt them--or at the school that allowed them to be hurt??
Just a question--I've been in schools where they allowed some pretty hardcore sparring and failed to watch that newbies didn't get hurt.
And I have seen schools where nearly every senior member of the school had knee injuries thu their approach to training.
How would you handle a student that refused to do "X" bcause they have concerns for their health?

My problem/s with 3td parties are many--but from a business standpoint it places what are effectively PR/Marketing functions in the hands of a "3td Party" that cares exactly NOTHING for the success of ones business---they are in busines to COLLECT the money they already paid the 1st party for--not to see that collections are handedled with consideration and care.

I can almost assure you that few people will recall that your nice enough to allow folks that are havng payment problems work around the school for a cost break BUT they WILL remember and tell EVERYONE they know about what a jerk the collections company was that kept "harrassing" them.

And "harrassing" is exactly what they will say.

IMO a better approach to "delinquncy" is to be more selective in your choice of customers.

Very different business model however.


Edited by cxt (02/01/08 03:10 PM)

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#335109 - 02/01/08 04:36 PM Re: Contracts made by schools [Re: cxt]
tkd_high_green Offline
Veteran

Registered: 05/16/05
Posts: 1031
Loc: Vermont
Quote:

I see. I can't disagree with the "read the contract" thing, but well, I guess you are saying it's ok to create dishonest and harmful contracts and use it even if it hurts folks. For the record, I feel no sympathy for folks that don't read what they sign either. That doesn't make it right for folks to use dishonest business practices, which you seem to be ok with.




More and more often, it seems that we are a culture of wanting everything for nothing, that it's ok to break promises? If more people read their contracts, then dishonest business wouldn't get away with it. It's one thing if the person is injured or moves, but what about the lazy SOB who just doesn't care to motivate and go train? If the instructor agrees to teach 15 students, those students agree to pay for that service to cover the cost of the building and equipment, and then half of them don't show up, it hurts both the instructor who is stuck with the bill, and the other students who can't train because there isn't enough income to cover the costs.

Proper escape clauses should be included in any contract, injury, moving, loss of job, etc. But is it fair to the instructor to allow breach of contract just because the student is unmotivated or has lost interest? That student agreed to do something for a length of time, seems to me they should be just as responsible.

Laura

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#335110 - 02/01/08 05:43 PM Re: Contracts made by schools [Re: tkd_high_green]
harlan Offline
Professional Poster

Registered: 07/31/04
Posts: 6665
Loc: Amherst, MA
It's simple...really. Without long-term contracts, the marketplace will determine the success or failure of these 'businesses'. Quality will be allowed to rule. Bad 'businesses' will fail. Instead of selling the promise that 'martial arts is for everyone', and capitalizing on the constant turnover of clueless 'customers'...the shorter-term contracts actually force them to fulfill the needs of the 'customer'.

On the other hand, if you want dedicated 'students' that stick around and support a 'school'...say for 5, 10, 20, 30 years...you HAVE to offer an art that is substantial.

Quote:

Quote:

I see. I can't disagree with the "read the contract" thing, but well, I guess you are saying it's ok to create dishonest and harmful contracts and use it even if it hurts folks. For the record, I feel no sympathy for folks that don't read what they sign either. That doesn't make it right for folks to use dishonest business practices, which you seem to be ok with.




More and more often, it seems that we are a culture of wanting everything for nothing, that it's ok to break promises? If more people read their contracts, then dishonest business wouldn't get away with it. It's one thing if the person is injured or moves, but what about the lazy SOB who just doesn't care to motivate and go train? If the instructor agrees to teach 15 students, those students agree to pay for that service to cover the cost of the building and equipment, and then half of them don't show up, it hurts both the instructor who is stuck with the bill, and the other students who can't train because there isn't enough income to cover the costs.

Proper escape clauses should be included in any contract, injury, moving, loss of job, etc. But is it fair to the instructor to allow breach of contract just because the student is unmotivated or has lost interest? That student agreed to do something for a length of time, seems to me they should be just as responsible.

Laura



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#335111 - 02/01/08 05:52 PM Re: Contracts made by schools [Re: tkd_high_green]
cxt Offline
Professional Poster

Registered: 09/11/03
Posts: 5823
Loc: USA
TKD

Not disagreeing--not really.

But could you not ask the same question of a person that provides sucky instruction and lousy classes and still expects people to show up and pay good money for their "lessons"???

You often have to sign a contract pretty early on to train---anything can look good with just a little bit of exposure.
Is it the students fault that at just 3 classes what they thought they knew about the school does not hold up say 6 months later??

Heck for that matter--if the student is "unmotivated" is that all the students fault???? Or does the teacher have to bear some of the responsibilty?
If the class is way to hard for me physically, or just really boring---is that all the students fault???

I agree with you--and I HATE people taking advantage--either direction.

I think part of the problem is that many owners/teachers want it both ways on these kinds of issues.
As in your example---sometimes they want to treat the whole thing a simple business transaction---but they ALSO often want to be seen as "sensei" and treat the interactions as something far more than "just" business.

If you look at any other business contract and compare to martial arts you can see where the reasoning breaks down.

I sign a contract with a rug cleaning firm to clean my carpets and they fail to get them clean--I can walk away and contract be damned.
Do martial arts schools expect to be treated the same??

Its "all business" when its time to get paid---but its "I'm the sensai" when it comes to how one expects to be treated by the students......or would it be "customers????"

IMO there are a whole raft of things that would need to be changed should one wish to apply a true business model to martial arts instuction...not the least of which would be needeing to establish some sort of rough performance standards for evaluation----anybody want to submit their school to another systems standards????

As harlan points out above (a really good point/way to say it BTW ) --in the abscence of contracts--market forces would take a much greater role in the "success" or "failure" of a given school.

A good question for any business owner might be:

"If I let my customers out of their contracts--how many of them would still CHOSE to do business with me????"

If a large propertion of a given business customers are only there until the time runs on their contracts---and only stick around because of punitive clauses in the contract itself----then IMO that is business with some SERIOUS problems.....problems that are only DELAYED by the contracts.





Edited by cxt (02/01/08 06:05 PM)
_________________________
I did battle with ignorance today.......and ignorance won. Huey.

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#335112 - 02/01/08 09:15 PM Re: Contracts made by schools [Re: cxt]
harlan Offline
Professional Poster

Registered: 07/31/04
Posts: 6665
Loc: Amherst, MA
You know...I think people tend to be supportive of the systems they are in. Laura will be pro on contracts because that is something that seems to work well in her school, and I see them as in the way as that is what I am used to.

I would, however, be interested in seeing how the supporter and naysayers break out. How about a poll?

Do you support contracts...and if you do...do you get any benefit? For example are you paid to teach, get lesser tuition, etc?
Contracts
Only one choice allowed


Votes accepted starting: 02/01/08 09:14 PM
View the results of this poll.

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#335113 - 02/01/08 11:56 PM Re: Contracts made by schools [Re: cxt]
Itami Offline
Newbie

Registered: 01/20/08
Posts: 14
Quote:

Itami

...

Quick question--if the contract states that if one "move more than X miles, have an injury etc"

Then why would you need to "help" them?"




If they have a legitimate reason to break the contract and they have the proof, the collection agency we use will usually have them jump through all the legal hoops to make sure it is legit (after all, they're wanting their money too). We make sure to keep close contact with those handling our student contracts, so if we know someone is moving we'll call our representative and let her know everything clears up. When we do that, they typically handle it a lot faster and will ask for less paperwork.

Quote:

What happens if someone gets injured and rather than have their contract "frozen" they just have no interest in training with the person/s that hurt them--or at the school that allowed them to be hurt??
Just a question--I've been in schools where they allowed some pretty hardcore sparring and failed to watch that newbies didn't get hurt.
And I have seen schools where nearly every senior member of the school had knee injuries thu their approach to training.




It is a contact activity so we do have injuries, but we try to handle it properly so people don't leave disgruntled. We're a business, but we care - if anyone of the people I teach get hurt (at the dojo or doing another activity) I constantly call them and write them to see how they're doing. We've only had maybe 2 or 3 cases of people intentionally hurting someone, each case it was a midlife crisis adult male trying to prove something - and each case we kicked them out, paid the collection agency the dues out our pockets, and watched over our student til they could return.
Quote:

How would you handle a student that refused to do "X" bcause they have concerns for their health?



We've had people who were quite obese, legally blind (very sweet girl), in their 60's (funny old fart), and have had a slew of other medical problems. We do our best to change up an activity if they're unable to do it, or if doing the drill can hurt them. Feeling a burn while working out is great, getting a burning feeling from injury ain't so good.
Quote:

My problem/s with 3td parties are many--but from a business standpoint it places what are effectively PR/Marketing functions in the hands of a "3td Party" that cares exactly NOTHING for the success of ones business---they are in busines to COLLECT the money they already paid the 1st party for--not to see that collections are handedled with consideration and care.


I don't usually handle it, but we actually get a list of our people who don't pay and we try to handle it ourselves. It's only when we don't have any luck or they blow us off (hearing "Oh yeah, I'll come in tomorrow and give you the papers you need!" for several weeks in a row, all the while they're still taking class) that we let the collection agency handle it. I am not sure if this is our special policy we have setup, or if this is how our collection agency prefers to do it, but it's the way it gets done at my school. It's a real eye opener to hear of these other examples.


And as for delinquency, it'll happen no matter what. The only people we never fear delinquent payments from are those that paid in full up front


Sorry if this is getting off topic of the original post (and that I typed so much!), but it's an interesting topic to discuss. That's what I -LOVE- about this place, I'm finding out information and situations that seem common out there that I've had no experience with or knowledge about. I believe whole heartedly in practice what you preach. I find it sad that so many schools that teach about ethics allow unethical business practices (whether directly or through a collection agency working for them).

I really hope some of your suggestions on the first page were attempted, cxt!

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