Job Discussion Forums

[senor boogie woogie]

Hola!

I was looking at the EF website, and it had a page for franchising. I looked for the heaven oof it, and they said, depending on location, an investment of 150,000-250,000 US Dollars!

My question is, FOR WHAT? A school requires desks, chairs, books (which I will sell to the clients for a profit) an office, office furniture, and a staff that I will underpay, which includes teachers and a few flunkies to answer the phone.

My big ticket item would be the building, which I would rent at first, and possibly buy with a 20 year mortgage later. Is the big price the real estate I have to buy to set up shop?

I could open a kick arse school with computers and have three teachers slaving in it in China for 50,000 USD. I will even throw in a Chinese teacher who will work for guanxi and a bowl of rice.

I am ruthless and uncaring enough to start an EF place, any bidders???

SENOR

[bnix]

Senor,I am not really too surprised at that figure you quote.It is pretty obvious who is going to make the big bucks...and it sure isn't the teachers.This franchising game...obviously the people who make out like bandits are the people selling the franchises.Then the poor guy who maybe has mortgaged himself to the hilt and put everything he owns on the planet into hock for the "privilege" of having an EF franchise tries to balance his books on the backs of the poor teachers...check out some of EF's ads on the International Jobs Offered Forum...especially the EF's in places like Indonesia...which say something like...'we pay a salary which is sufficient to live on in Indonesia."...so the poor teachers wind up paying for the fact some greedy franchising op is making big bucks...

[Wolf]

Man, in the "opening up economy" of the PRC (UUUG I SAID THAT EWW WASH MY MOUTH OUT WITH SOAP) why even bother paying for a franchise? WTO copyright laws are something that, well, don't exist.

Seriously though in China at least the general populace doesn't seem to care very much about what the school's name is. You're average Lei Feng on the street wouldn't know EF from NOVA from NATO. (I'm not insulting anyone's intelligence, it's just that most people get no exposure to non - PRC Earth.) If you have a name that's remotely in English, and do a bit of adverstising showing white faces teaching at your school, and you stand a chance to make money. At least that's based on my limited expereince. In my city I did two VERY SHORT part time gigs at private companies. Both were new (this year) and both made money simply on the fact that they had foreign teachers. And sex appeal at one place. I taught there for a month and every day I was there the reception girls (all young girls) always wore clothes that were a) so tight I wondered how they could breathe and b) um ... see through to an extent ... garments not normally street wear unless you're Madonna visible....

In Japan people seemed willing to trust a famous brand name. However, there are still plenty little guys who seem to at least pay the bills. Heck, some company names aren't even proper Engish.

Yeah, my personal, subjective opintion. Based on limited expereince. But if I were to open my own Hogwan/Eikaiwa/L'ecole D'angias, and some guy came along and asked me to pay a quarter of a million US$ to put some name on the school I would say


NO!

Heck, why not check out you country of choice's copyright laws and then misspell the name just enough not to get sued, then use it

Feel free to contradict. Actually, I'd like to hear from someone who knows a LOT more about this than me. Just let me chant the sacred spell


"I am the keeper of the sacred fire of Arnor. You dark fires shall not avail you, flame of Urun."

Just in case it's necessary.

[scot47]

Franchising is a very strange idea, but it seems to have caught on.
Clearly the money is made, not by the bozo who buys the right, but by the guy who sells the idea. Beware ! And generally speaking, remember that for many people opening a language school is the first step to bankruptcy. Probably insanity too. Do something safe with your money. Like going to the races. At least you might have some fun.

[Roger]

I find nothing wrong with the idea of franchising per se; you buy a name at its market price just like some people buy a Merc rather than a Nissan.
With that name comes a minimum of dependability based on a proven track record. Admittedly, a training centre like EF does not have to "prove" very much, but if it has grown to a certain size in its home turf then you can assume it is designed to be profitable, and if so, franchise takers must invest in this brand-name.
Of course, US$ 150'000 is a stiff price. But it includes relatively good materials (again, they are branded). Evidently, EF enjoys name recognition around the world.

A couple of years earlier I was negotiating with an Israeli brand. It was a lot cheaper, and in my opinion it was very smartly designed. They would sell you teaching kits that you must resell to your learners at a set price. They also control the size of your classes.Teachers have to undergo training in Israel or Europe. The founder is British and knows her province.
The price was in the low four-digit region.

[Stephen Jones]

If you are an EFL teacher the idea of setting up a franchise seems strange. But the point is that the people setting up an EF Franchise are not English teachers; they don't know the business, they just have the money and want to invest it somewhere.

You buy a franchise either when the market is such that you have no choice (for example fast food in the US), or when you have made your money in another business and are looking for somewhere to invest. The money you are paying the franchise operation is hopefully less money tnan you would lose trying to learn everything from scratch.

With regard to EF it does appear that the figutes they give are for the total investment, not just the money you pay them. Teachers who never have opened a language school often underestimate the money they need to sink into it. You are higlhly unlikely to find space with room sizes that exactky fit your needs so you will have to take an empty shell and partition it or build wallls form scratch. And yuu are going to be paying rent (and it won't be cheap because the rule of "Ger the property opposite the Town Hall applies",) all the time you are having the buikders iin, and no income. And to start with you are going to have to pay a fair amount in advertising.

[ls650]

[quote="scot47"]Franchising is a very strange idea, but it seems to have caught on. Clearly the money is made, not by the bozo who buys the right, but by the guy who sells the idea. quote]

Actually, money is made by both. If you buy a franchise, be it a McDonald's or an EF, you're paying a premium for that name because the name in itself will draw customers and money.

Anyone who buys a McD's franchise and can't make big profits obviously wouldn't have been able to by running "Joe's Burger Stand". I imagine much the same for an EF franchise.

[Stephen Jones]

MacDonald's actually make their money of real estate. When you get a franchise from Macdonald's you pay them way past the market rent.

Their MD once admitted that the only reason they sold hamburgers was that it provided their clients with the best return for ther investment and thus enabled them to keep the rents high.