# Contracts



## Brandon Fisher (Apr 11, 2006)

I am in the process of opening my first store front dojo.  Would anyone be willing to share the contract they use to sign up students with me?

Thank you!!


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## SFC JeffJ (Apr 12, 2006)

I got to go with my wife on this one.  No contracts at her TKD school, just liability waivers.  I did study at a school with contracts years ago, and while the instruction was wonderful, I didn't care for the contracts.  Made the whoe experience seem like a business and not a dojo.  Of course if students pay you, it is a business, how's that for a contradiction.

Just my opinion,

Jeff


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## Brandon Fisher (Apr 12, 2006)

I appreciate that.  I also understand the reasoning and wish I could make it fly.  I think the contracts for me are mainly just to make sure I get paid what I am owed.  The rent is hefty where I am looking but it is on the cheap side up here.  Average up here I have found to be about $6000 or more a month.  Tough nut to crack but luckily I found a space that we are looking at for 1/2 that.  I wish I could teach free but this will be full time for me so it has to pay the bills unfortunetly.  Some people up here really are not that honest and they will bail on you on a whim thats the only reason I am looking at contracts.


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## SFC JeffJ (Apr 12, 2006)

We just have a don't pay, don't train policy.  Also, I've seen several financialy sucessful schools that don't use contracts.  But hey, whatever works for you and all that.  Different circumstances call for different measures.

Jeff


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## Hand Sword (Apr 12, 2006)

I say, also, whatever works for you. Personally though, I don't like contracts. I wouldn't do them as a student or a teacher.


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## Brandon Fisher (Apr 12, 2006)

Yeah I may find it doesn't work and pull them.  Who knows??  Only time will tell.  Thanks for your opinion it helps.


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## Hand Sword (Apr 12, 2006)

From my experiences, people don't take the idea of contracts well. People don't like to feel tied down. Look at how long the average marriage lasts.


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## Brandon Fisher (Apr 12, 2006)

Thats a very good point.  You guys have given me alot to think about.


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## bushidomartialarts (Apr 12, 2006)

nobody at my studio has balked at signing a contract.  in the 10+ years i've been in the industry, i have yet to see somebody decide not to train because of one.

mine have a 30-day release clause, and i make it clear that they can quit at any time.

contracts are good for a couple of reasons. 

 it supports the idea of long-term training.  

it gives you a leg to stand on if somebody decides to take advantage of you (for example, a family suffering 'financial hardship' asked to not pay for a couple months. i said sure, but train anyway and make it up to me when things get better.  they recently rolled up in two brand new cars with vanity plates and announced they were moving away and couldn't afford to pay their bill.)  

it has an air of professionality about it.

finally, for long term business, your contracts (i.e. accounts receivable) are what banks will use to decide if/when/how much money to loan you.  this will be huge if you ever need to expand, or even get a line of credit open so you can make it through slow times.

these are mostly business reasons.  but anybody who tells you a martial arts studio isn't a business is steering you wrong.  don't run a karate school to make money, but always keep in mind that making money is what allows you to run a karate school.  it's a business, so don't balk at being businesslike.


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## Andrew Green (Apr 12, 2006)

I'd go with the 30-day notice to quit one, set everyone up on EFT, if they don't want to go on EFT add $10 / month.

You might even consider a billing company, depending on your personality.  For me, I was never good at hounding money from people or enforcing contracts.  I just wanted to teach


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## adictd2tkdgirl (Apr 12, 2006)

bushidomartialarts said:
			
		

> nobody at my studio has balked at signing a contract. in the 10+ years i've been in the industry, i have yet to see somebody decide not to train because of one.
> 
> mine have a 30-day release clause, and i make it clear that they can quit at any time.
> 
> ...


 
I completely agree with this post.  As long as you have a release clause, noone will have a problem with it.


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## SFC JeffJ (Apr 12, 2006)

Now that's new to me.  The MA studio I was in that had the contract did not have a release clause.  However they did let me out of it when I had to move.  I would not say no to a school that had exceptional teaching just because they used contracts.  But If I had to choose between two good schools, I would choose the one that didn't have them.

Jeff


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## stickarts (Apr 12, 2006)

When I first opened in 1993 I hated the very idea of contracts, however, now we are using contracts and it has made our whole enrollment process more professional (getting everything on paper, a clear understanding and expectations), we collect payments more easily now and can spend time on teaching, not collecting tuition, and we have less instances of people taking classes and then quitting and never paying what they owe.

Students do not have to enter into a contract. They can choose to pay month to month with no committment although it costs a bit more.
Also, students may escape the contract if they have a legit reason such as they are moving, injured, or personal issue. 

Before i opened a school i thought of schools with contracts as kind of the evil empire, but now that i own a school I understand the hard work that goes into running it and realize that collecting tuition can be very challenging.   Most school owners that i know are honest hardworking people and not many people realize just how difficult it is to operate a successful school. 

We used an attorney to draw up our contract. It's important to understand the laws of your state and make sure the contact meets any statutes necessary and you may also have to get licensed as a health club with the state if you use long term contracts. It's important to legally cover all your bases.

I have seen successful schools that do use contracts as well as successful schools that don't use contracts. 
Either way, the key is to provide quality instruction and treat your students right while protecting yourself as well. Schools that don't protect themselves don't last long because there are a million and one things to blindside you if you are not careful!! 
I hope this helps.


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## Flying Crane (Apr 12, 2006)

If you decide to not use contracts and just go month-to-month, insist that everyone pay for the month in advance, or they don't train.  This way nobody skips payment after they have had classes.  If they didn't pay, they didn't get the class.  Would this potentially eliminate the need for a contract, or do you view this as a very short-term contract?


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## stickarts (Apr 12, 2006)

Flying Crane said:
			
		

> If you decide to not use contracts and just go month-to-month, insist that everyone pay for the month in advance, or they don't train. This way nobody skips payment after they have had classes. If they didn't pay, they didn't get the class. Would this potentially eliminate the need for a contract, or do you view this as a very short-term contract?


 
You can do that too however its a lot of work keeping track of all of that, making the phone calls etc...For example, we have 120 students. In our case, we would never have time to teach!
Having contracts and automatic payment plans allows us to focus on teaching.
I think strictly paying upfront would work best for a smaller school. Good idea. I do know schools that do that!
Anything signed with a promise to pay in exchange for the service is a contract.


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## Flying Crane (Apr 12, 2006)

stickarts said:
			
		

> You can do that too however its a lot of work keeping track of all of that, making the phone calls etc...For example, we have 120 students. In our case, we would never have time to teach!
> Having contracts and automatic payment plans allows us to focus on teaching.
> I think strictly paying upfront would work best for a smaller school. Good idea. I do know schools that do that!
> Anything signed with a promise to pay in exchange for the service is a contract.


 
hmmm... ok, how about this idea: make up a card for each year, with a space on it for each month.  When a student pays for the month, you put a stamp on the space, to show they have the right to train during that time.  Whenever they show up for class, they have to show you the card.  No card, or no stamp, no training until they pay.  Payment must be done during say 1/2 hour before class starts.  Once class starts, if they haven't paid yet, they go home that day and come back next day to pay and train.  No interrupting class to deal with payments.  

If you have 120 students, how many typically show up for each session?  I don't suppose it is anywhere near all 120?  Would it be a low enough number to be able to check each card before class?


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## stickarts (Apr 12, 2006)

Flying Crane said:
			
		

> hmmm... ok, how about this idea: make up a card for each year, with a space on it for each month. When a student pays for the month, you put a stamp on the space, to show they have the right to train during that time. Whenever they show up for class, they have to show you the card. No card, or no stamp, no training until they pay. Payment must be done during say 1/2 hour before class starts. Once class starts, if they haven't paid yet, they go home that day and come back next day to pay and train. No interrupting class to deal with payments.
> 
> If you have 120 students, how many typically show up for each session? I don't suppose it is anywhere near all 120? Would it be a low enough number to be able to check each card before class?


 
That sounds like a workable plan!
We currently use electronic funds transfer so that the tuition payments are automatically deducted at the beginning of the month. if there is insufficient funds, we promptly are notified. What's great is no having to keep track of who paid, who didn't. Very few phone calls. The same company also allows us to accept credit card payments. We pretty much bypass the whole ordeal of detailed book keeping.

We have many different classes broken up by age and ranks. The largest class can be up to 20 students at a time with several instructors there to help. An average class has 10 students. The 120 count also includes private lesson students. 
I also have a full time job to ensure that my family will eat  , but the school we (my wife and I) do because we love it! It is successful but would be a risky way to make a living.


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## Flying Crane (Apr 12, 2006)

stickarts said:
			
		

> That sounds like a workable plan!
> We currently use electronic funds transfer so that the tuition payments are automatically deducted at the beginning of the month. if there is insufficient funds, we promptly are notified. What's great is no having to keep track of who paid, who didn't. Very few phone calls. The same company also allows us to accept credit card payments. We pretty much bypass the whole ordeal of detailed book keeping.
> 
> We have many different classes broken up by age and ranks. The largest class can be up to 20 students at a time with several instructors there to help. An average class has 10 students. The 120 count also includes private lesson students.
> I also have a full time job to ensure that my family will eat  , but the school we (my wife and I) do because we love it! It is successful but would be a risky way to make a living.


 
Well, there's nothing like automatic bill pay to make sure it happens without the hassle of dealing with it.  No bouncy checks either.  I assume this kind of arrangement carries some kind of fee with it?  I guess if it is reasonable, it would certainly be worth it once the school reaches a certain size.

I myself don't teach, but just thought I'd put in my two cents.


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## Brandon Fisher (Apr 12, 2006)

My wife and I are doing this together also and she has a full time job teaching 7th grade math so health insurance and things like that are covered.  But teachers don't make a ton of money :-( but thats life.

She mentioned the auto payment idea tonight strangely enough so maybe I will look into that as well.

Thanks keep the ideas coming I really appreciate it.


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## Ceicei (Apr 12, 2006)

When I started at my current dojo few years ago, my school has both types available, month to month payments (with liability waiver form of course), and contracts in increments (6 mo, 1 year, and 2 years).  The contracts have generous release clauses and money back for the remaining time, so no one needs to feel bound if a situation comes up requiring a break off from the contract.

We have found that the month to month is ideal for those who are starting out and not sure of long term commitment, or with an unstable situation.  Parents frequently prefer month to month for their children.  The adults tend to prefer contracts (with the exception of college students who prefer the month to month).  The contracts also include some perks (such as tuition and product discounts, ongoing private lessons, and belt fees included), so the long-timers prefer them.

- Ceicei


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## elder999 (Apr 12, 2006)

I use contracts tied to both a period of time and a level of rank, whichever comes last, and with a one-time release clause and provisions for...well, life getting in the way of training. I especially like having it tied to rank because if I don't want to teach someone anymore than a certain amount, I am not legally obligated to do so either-all the _business_ reasons given for having contracts are valid if one is in business for profit or even running a not-for-profit, but it also helps to have a legal leg to stand on to say that you fulfilled your obligation to your customer, which, sadly, is how the relationship is viewed, legally. 

The unfortunate thing is that we ofen don't know very much about the quality of the people we're teaching, sometimes for quite some time, but especially when they first sign up-and good students can be bad people. I had someone sign up who I later found out was abusive towards his girlfriend and used drugs. I didn't have any trouble kicking him out then and there, but if I had, I only would have been obligated to promote him to a certain level....*then*, of course, I'd have kicked him out....


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## bushidomartialarts (Apr 13, 2006)

Andrew Green said:
			
		

> I'd go with the 30-day notice to quit one, set everyone up on EFT, if they don't want to go on EFT add $10 / month.



10-4 on that.


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## stickarts (Apr 13, 2006)

Flying Crane said:
			
		

> Well, there's nothing like automatic bill pay to make sure it happens without the hassle of dealing with it. No bouncy checks either. I assume this kind of arrangement carries some kind of fee with it? I guess if it is reasonable, it would certainly be worth it once the school reaches a certain size.
> 
> I myself don't teach, but just thought I'd put in my two cents.


 
We are charged a few % but it is well worth it. You easily recoup that just by collecting payment from some that would otherwise not have paid us. Even people that we have considered friends didn't hesitate to skip town without paying from time to time.

I always enjoy reading your posts and you have great feedback!


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## stickarts (Apr 13, 2006)

Brandon Fisher said:
			
		

> My wife and I are doing this together also and she has a full time job teaching 7th grade math so health insurance and things like that are covered. But teachers don't make a ton of money :-( but thats life.
> 
> She mentioned the auto payment idea tonight strangely enough so maybe I will look into that as well.
> 
> Thanks keep the ideas coming I really appreciate it.


 
If you want to grow the business and get a steady stream of income, i recommend some type of auto pay. I wish i would have done that from day one. You work hard and deserve to be able to pay the bills!


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## stickarts (Apr 13, 2006)

Ceicei said:
			
		

> When I started at my current dojo few years ago, my school has both types available, month to month payments (with liability waiver form of course), and contracts in increments (6 mo, 1 year, and 2 years). The contracts have generous release clauses and money back for the remaining time, so no one needs to feel bound if a situation comes up requiring a break off from the contract.
> 
> We have found that the month to month is ideal for those who are starting out and not sure of long term commitment, or with an unstable situation. Parents frequently prefer month to month for their children. The adults tend to prefer contracts (with the exception of college students who prefer the month to month). The contracts also include some perks (such as tuition and product discounts, ongoing private lessons, and belt fees included), so the long-timers prefer them.
> 
> ...


 
we have observed the same thing!


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## stickarts (Apr 13, 2006)

elder999 said:
			
		

> I use contracts tied to both a period of time and a level of rank, whichever comes last, and with a one-time release clause and provisions for...well, life getting in the way of training. I especially like having it tied to rank because if I don't want to teach someone anymore than a certain amount, I am not legally obligated to do so either-all the _business_ reasons given for having contracts are valid if one is in business for profit or even running a not-for-profit, but it also helps to have a legal leg to stand on to say that you fulfilled your obligation to your customer, which, sadly, is how the relationship is viewed, legally.
> 
> The unfortunate thing is that we ofen don't know very much about the quality of the people we're teaching, sometimes for quite some time, but especially when they first sign up-and good students can be bad people. I had someone sign up who I later found out was abusive towards his girlfriend and used drugs. I didn't have any trouble kicking him out then and there, but if I had, I only would have been obligated to promote him to a certain level....*then*, of course, I'd have kicked him out....


 
How do you tie it to rank? Do you mean the contract ends when student hits a pre-determined rank? for example, if its for 1 year or blue belt, it will end after one year unless they achieve blue belt first?


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## Flying Crane (Apr 13, 2006)

stickarts said:
			
		

> I always enjoy reading your posts and you have great feedback!


 
Well thank you sir, I certainly appreciate that!


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## elder999 (Apr 13, 2006)

stickarts said:
			
		

> How do you tie it to rank? Do you mean the contract ends when student hits a pre-determined rank? for example, if its for 1 year or blue belt, it will end after one year unless they achieve blue belt first?


 
It's actually for a set number of classes, and the attainment of a set rank, whichever comes _last_, with an extension proviso-that way, if someone can't achieve a certain rank within the time (number of classes)of the contract, then it's extended until they do so, and, if someone attains the rank before the term, then they continue until the number of classes for the term of the contract are attended, at either of which time we sit down and sign a new contract, and/or have a conversation about their continuing to train......

Short answer:yes, the contract ends when the student reaches a pre-determined rank.


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## stickarts (Apr 13, 2006)

elder999 said:
			
		

> It's actually for a set number of classes, and the attainment of a set rank, whichever comes _last_, with an extension proviso-that way, if someone can't achieve a certain rank within the time (number of classes)of the contract, then it's extended until they do so, and, if someone attains the rank before the term, then they continue until the number of classes for the term of the contract are attended, at either of which time we sit down and sign a new contract, and/or have a conversation about their continuing to train......
> 
> Short answer:yes, the contract ends when the student reaches a pre-determined rank.


 
Thank you! I haven't heard of that before and thats an idea I am going to mull over to see if we can apply it!


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## shifu (Apr 14, 2006)

Brandon Fisher,

Hi Brandon,

Please send me your e-mail address and I'll send you a copy of the contract I use. It was designed by the peak body for martial arts in Australia - Martial Arts Industry Association and may be of some interest or help to you.

Regards,


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## Brandon Fisher (Apr 14, 2006)

Shifu,
Thank you!! I am sending you a private message with it now.


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## shifu (Apr 15, 2006)

Hi Brandon,

I've sent it to your e-mail. Hope it is of some use to you.

Regards,


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## Brandon Fisher (Apr 15, 2006)

Got it thanks!!


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## Scott Yates (Apr 28, 2006)

Just a suggestion. Get professional help. If you want to run a good but profitable school, go to the experts. 

As for contracts, they set the presidence for your school. If you ask for a commitment, they know what to expect from you. If you collect month to month at your dojang, you either do not have enough students, or you are not out finding people to enroll. Either way, no good.

Two years ago, after listening to most of the bone heads out there, our schools came across some professionals who "figured it out". In those two years, my school has expanded from 600sf to over 3000sf. From 75 students to over 200. From averaging (B4 bills) $10,000/month to now $35,000/month. My life as an instructor changed tremendously. We now have 5 schools, 8 staffed instructors, and over 1000 students total. Two years ago I was working two jobs and working 15 hours a day. I now run my school full time 50-60 hours a week, like any other professional.

The kicker is we have been voted the best school in southern NJ for 5 years in a row. I know of all the misconceptions of all those poor school owners about the mcdojo. Yes, there are some out there. But not all successful schools are that way. I have the full support of 8 police departments, 7 school districts which have us in twice a year, 15 Home School Associations, local churches and boy/girl scout orgs, and on and on. 

I am telling you this for one reason. If you have a true desire to teach MA's and impact peoples lives, do it big. I can't tell you how rewarding it is to see my 210 stdents show up each week enthusiastic to learn more.

If you are truely interested in learning this you may PM me at sinmoodo@yahoo.com anytime. I have nothing to gain from this except knowing I helped another true MAist reach their dream. The same thing someone did for me a few years back.

Respectfully,

Scott Yates
SinMoo Hapkido
New Jersey


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