Job Discussion Forums

[in_asia_bill]

I just found this:

http://www.ef.com.cn/englishfirst/contact/faq.aspx

Geez!

To buy an EF franchise you need "A sense of social responsibility" and "honesty", oh, and between RMB 1.5 and RMB 2 million.

1.5 - 2 million Yuan! Jesus! I knew these franchise owners were rich but had no idea they were THAT rich. Thats a western level of investment!

It says that "After the school has opened you need to pay the continuous royalty fee: 6-10% on gross sales is due on the 5th of every month."

This is why me and my girlfriend were not declared to head office! As we werent on the register none of our classes had to be declared so none of our students had to be declared so the owners could skimp and save on that 6-10% of gross student fees.

The website also says it will probably take 3-5 years to begin to make a profit! Is that true?

Is this a good investment? If not, why do so many Chinese business people go for it? Does it cost less to begin a school on your own without a franchise deal from EF or some other company?

[FuzzX]

Its cheaper starting your own. What does a franchise deal offer? Textbooks? I mean whats the advantage of having this franchise over doing your own school?

[mondrian]

[vikdk]

[englishgibson]

You might've hit the nail on ..EF there.
In fact, there are some interesting EF franchisees around China. Getting into this one is rather dangerous and I have been threaten before.
EF Head Office and their Marketing Dep does prey on those with money and connections. They often look for government officials/retired government officials, army officers/retired army officers etc.
I'd go as far as to tell ya guys that some actually wash their money in this biz.

Peace to brand new Hondas of Chinese with their 3,000 RMB monthly salaries
and
cheers and beers to retired Chinese that have got away in their Toyotas

[in_asia_bill]

[in_asia_bill]

[vikdk]

[no_exit]

A lot of those EF "clones" that we hear about are actually EF pull-outs, not just Kunming and Shenzhen. What can headquarters do if a school defaults on it's franchise fees? Revoke the franchise. However, it is the franchise owners themselves that are leasing the building the school is in, and the teachers can usually be persuaded to sign new contracts (in the Kunming case, probably about 90% of the teachers stuck around. Like the parents, they didn't much care who they signed the contract with, only that the contract delivered what was promised), and the curriculum, once established, could simply be copied. People STILL refer to that school as "EF" to this day, even though the sign is gone along with any actual reference on paper to EF -- it was EF for 4 years and it remains EF in the minds of the public. So if you were a ultra-rich Chinese businessperson (and you don't make that kind of money in China by keeping your hands clean in the first place) you'd probably already be thinking of ways to cheat the system, how to capitalize on the franchise name without paying the franchise costs. Once you've pulled out of the franchise, or your franchise has been revoked, you are of course free to sell your school to anyone you want.

This can't happen with other sorts of franchises in China because they offer products that are not easily reproducible. Think McDonald's (because we all love that EF/McD's comparison around here!) -- in theory, couldn't a McD's franchise owner do the same thing? Yes, but as soon as they stopped being a franchise and paying franchise fees, they wouldn't have access to the burgers and the fries that make McD's what it is. But because EF is an educational franchise, and it's product is ridiculously easy to rip-off (call it piracy, because that's the equivalent), you can effectively copy-cat an EF center with no discernable change in the quality of the product. The teachers that are now at that EF former EF center where I used to work still go about their jobs in the exact same way they did before, using the same textbooks (which are no-longer even EF books because EF seems be using it's own books now, but none of the parents here know that).

Interestingly, Becase the switch happened when some of the teachers were mid-contract, the center manager wrote new contracts and offered incentives to the teachers who would stay on (raises and bonuses, and cold hard cash in lieu of the EF insurance that was previously offered, which suited most of the FTs just fine). EF's head office offered all the Kunming center teachers the option to relocate to other centers, but, not surprisingly, none of them took them up on the offer. The teachers who didn't sign new contracts either left China or (like myself) went on to do other non-EF related things in Kunming. I think this proves a pretty strong point, and that is that the majority of EF teachers seem to see themselves as employees of a particular center, not of "EF the international franchise."

This is an interesting topic, by the way, because it brings up an aspect of EF, and franchising in China as a whole, that hasn't been discussed on these forums before (that I know of anyhow). I hope that the discussion can continue, and not turn into yet another EF free-for-all (I suppose the 3 other topics on the first page can serve that purpose well enough).

[cj750]

[no_exit]

I wish I knew for sure, all I know is that in the case of EF Kunming, the lease was held by the franchise owner, and not by EF itself, although that might have been one of those special hong bao procured arrangements. I definitely wouldn't be privy to that kind of information, although it would be very interesting to know! I agree that it only makes sense from the franchise's perspective to NOT allow the individual franchise owners to have such direct control over the lease, control which would make breaking the franchise agreement that much easier.

[englishgibson]

[in_asia_bill]

I think the EF franchises in China are giving the whole of the EF organisation a bad name. I read recently that a lot of beer companies have pulled out of the CHinese market because of fakes and copies which they thought were adversely affecting the brand name as a whole in the rest of the world, not just in CHina. The English beer Bass got out of the Chinese market in 2000 and Guinness is now withdrawing from its licensing agreement. I think the same will happen with EF. They will soon cease their franchise operations. When me and my G/F came to China we thought EF were great. She had done a year abroad scheme thing with them as an Au Pair, and said they were super. A mate of mine works for them in the UK, in a seaside resort in the south of England and he too says they are great. But these Chinese-run/owned franchises in China are the pits. Now if I know someone works for EF in China I wont even give them the time of day. In fact, I wouldnt piss on them if they were on fire.

[vikdk]

[clark.w.griswald]

Personally I think that the EF franchise fees are just too high and I think that this, more than any other single reason, is why franchisees jump ship. I don't think that it indicates dissatisfaction with the organization but moreso an opportunity by the franchisees to try and save a few bucks. So EF's biggest mistake here in my mind is believing that their name is worth more here than it probably really is.

The value of a franchise is of course very clear in the beginning as business owners learn from the franchisor how to run that type of business. Once the business is up and running however the value decreases (at least in the eyes of the franchisee) and they jump ship.

The same situation has happened in Taiwan with the Subway sandwhich chain. Previous franchisees jumped ship and started out in competition as the 'Subber' chain. Given the choice most foreigners that I know there will still choose Subway however as Subber really just doesn't cut it. In some cases Subway have started fighting back by opening Subway stores next to these Subber stores that have jumped shipped. As Subway franchisees they had guaranteed sole rights to key areas but once they jump ship they obviously lose these rights. It seems to be working as the Subways stores are busier even though they are more expensive.

While the EF brand name may encourage students to sign up in the first place, I don't think that it is the main reason that they sign up. If those franchisees who jump ship can maintain the same level of service then I have no doubt that they will be as successful in their markets as they were under the EF name. If however they start to cut corners once outside of the EF framework then they will likely become just another English school.

From a teachers point of view I am not sure that any of this really matters provided that you get paid for the work that you do and that you feel comfortable with the position that you have.