Job Discussion Forums

[halroach]

I heard that EF and other international language schools have not been allowed to expand, or open new branches. Has anyone heard about this? It may be that they can sell franchies(?) but they cannot open their own schools. From what I've heard this is the case all across China. Has anyone heard about this?

[Neilhrd]

EF opened a new branch in Nanning about 2-3 months ago. It is a brand new purpose built building in a prestiguous part of town which would have required approval from senior levels of government and substantial investment.

I don't work for them but my understanding is that it is a franchise owned by a Chinese businessman. From what I have heard on the grape vine they are struggling to find students because EF is expensive and many cut price, usually illegal, schools operated by Chinese business people have also opened recently.

I was at a conference recently where a senior official of the Guangxi Education Bureau dropped a heavy hint that the government is well aware of the illegal schools and that a crackdown of some kind is imminent.

So I suspect that what you have heard is rumours of a crackdown on illegal operations but legal franchises such as EF are still allowed.

[englishgibson]

As far as I know EF Nanning opened almost a year ago, not three months.
However, the truth is that it is struggling and that studying at EF may be quite expensive. EF high prices are due to high franchise fees as well as royalty fees to the EF Head Office. Then, the EF Head Office "promises" to investors of return on their investments in "three years" is quite unrealistic.....2,000 000 RMB back in three years?

Most of "nervous" investors have tried to run or interfere in running of their operations tremendeously and that's created numerous issues too. Well, blaming investors for losing their 2 mil...?
A few schools have done well though.

Speaking of "expansion", some investors around China have gone beyond any ethics, have copied/cloned their franchises and opened their own EF-look alike centers. Of course that's brought a new meaning to legal or illegal.

"Non Expansion" could be due to many reasons.....there are lots of fights "up there" in Chinese education system and licensing of private centers....those foreign ones are quite a subject of discussion for Chinese officials and their education system that's being kind of "second guessed".

Chinese want the RMB to stay in China and foreign franchisers might be taking it out and across the border ...... well after exchanging. Anyway, that's just a guess

Peace
And
Cheers and beers

[fallon77]

Speaking of EF, I have noticed a few EF locations advertising that they are not "franchises" and are company-owned schools. Perhaps they have realized that with all the horror stories not many FTs are interested in being associated with them.

Regards,
fallon

[Malsol]

Teaching a nation to say 'no problem'
20 students at a time.

Don't you mean "promwem"?

[Voldermort]

[no_exit]

Franchise costs are expensive, and so is EF tuition. I'm not sure about Nanning, but our EF in KM is still only a few years old, and it just keeps on growing, despite a number of competitors with lower tuition costs. Chinese people like a name brand, which EF supplies. The first thing you see when you walk into the school is this big map with all of the locations worldwide written on it, which just screams prestige to Chinese parents.

Still, it is hard for investors to make a profit, despite big numbers, due to those franchise costs. I always wonder if our EF would do as well as it does (as far as enrollment) without the brand name franchise, because the Chinese investors would certainly make a lot more money.

[englishgibson]

Chinese do like "brand names", don't they? They often are quite "easygoing" if it comes to a "counterfeit" too.
Regarding that "EF brand name", it's the "name" not the service that's uniformed.

"Taking someone to court in China"....that's funny

[halroach]

From what I hear, EF are NOT supposed to be expanding their wholly owned schools right now and they will get into trouble if they are caught doing that. Franchises may be another matter. In the meantime it seems they're advertising very aggressively in Shanghai at the moment. I guess they want to push their online effort in order to overcome the hassle of physical expansion.

The Economist had an article about EF a few weeks ago. Interesting that they are not making money. I thought the article made sense. What an industry. What a country. It's probably the same for Wall Street and other international brands.

It might actually be a lot better for teachers if these companies were profitable. But thx to the Chinese goivernment that's not happening.

[englishgibson]

It'd be good for teachers, if centers/schools profited, wouldn't it? I guess, Chinese government has got an interest in education and it does not wish to have especially foreign influence in its system. We are in China to "go along", not to "create new roads".
The way I understand it is that some foreign franchised private mills have "created that new roads" to education and that's telling the current system in China that there are different ways and those ways might be better.

[halroach]

My view is that the government policy of disciminating against foreign owned organizations is less about ideology and more about profits these days. The Olympics are coming , the World Expo is coming, and there are elements in or near the government who have a vested interest in seeing local operators do as well as possible. I think this indicates a lower level of corrruption (though still at the Beijing level) than any sytematic attempt to protect ideology from the highest levels of the government.

Blended learning is an obvious strategy. It frees EF of the nightmare of building physical distribution and enables them (in theory) to approximate that through franchises. Despite losing money they will certainly push as hard as possible with both, probably becasue (a) they don't have many options, and (b) the combination may work. (I wouldn;t bet on it, though.)

And yes, any industry benefits from profits and healthy development. In the end the government are harming the foreigners, the local schools (by creating false protections that weken them), the students (by making the industry inefficient and therfore mor costly) and the industry as a whole (by stunting it). Nice going, huh?

[englishgibson]

Halroach, you might have a good point in those interests of Chinese government there. Chinese nationalism has its spice in it, doesn't it?

Regarding that EF Blended Learning, I'd say it's not just about reducing the need of teachers, but also about efficiency, profitablility and prestige.

Cheers and beers

____________________________________________________________
Doing business in China is a venture....teaching is edutaining for students

[halroach]

EnglishGibson,

In the end all businesses are about profits (or should be about profits). I am quite certain that that is the driver behind EF' behaviors. Reducing their required number of teachers (and therfore managers, staff, recruiters), and saving on infrastructure/distribution costs, not to mention marketing costs, legal and administative costs, etc, are all forms of efficiency. (Think of the costs of going to the various cities and forming relationships with potential partnetrs - it must be horrendous.)

The online component may bring in revenues without any of those hassles. EF can pass on those inefficiencies to the franchisees - it is they who have to build, hire, recruit, market and manage. This leaves franchisees with single digit margins (if they are lucky) and poor long term prospects. In this scenario, weak profits for the franchisees lead to weak management. (Profits are the life-blood of any private organization.) In the end weak mangement leads to what we see on this forum all the time - the nightmare that EF can be for teachers, customers, franchisees, etc.



EF have been forced into this but it is actually a better China strategy than their previous one. It's the smart/rational thing to do, given the hand they've been dealt. Although I have no respect for them academically, I almost hope it works for them. TESOL is such a miserable industry (from a business perspective) but it's made much worse by the situation in China.

[englishgibson]

Undesputably right that all business are about profits, although when it comes to education........
EF Blended Learning's introduction to EF franchisees and the market was the lamest introduction of a product I have ever seen. EF Directors of Studies were put in a position of "pushing it" with their employers, told that the product had to start right away and lied to that the EF server for the support of Blended Learning was in Shanghai. Well, DOSs were not in any position to "push it" (they'd risk their jobs since it was/is a very sensitive issue in EF), product did not start at about 90 percent of EFs in China (maybe till now which is like 2 years later), and that EF server was (and maybe still is) in Korea.
So, EF frachise management does not deserve any expansion of its farce operations whatsoever. Further more, they've destroyed carriers of scores of individuals or wasted their times tremendeously. They've hassled their stuff and stressed the hell out of them. And, I am not speaking about the Chinese "copycats" or shall I say "EF clones" that have started operating around China, courtesy of the EF franchisers poor management in China.

EF Non Expansion might be the greatest thing to happen in China with regards to any private mills.

Peace
and
Cheers and beers