Contracts

[Brandon Fisher]

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!!

 

[SFC JeffJ]

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

 

[Brandon Fisher]

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.

 

[SFC JeffJ]

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

 

[Hand Sword]

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.

 

[Brandon Fisher]

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

 

[Hand Sword]

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.

 

[Brandon Fisher]

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

 

[bushidomartialarts]

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.

 

[Andrew Green]

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

 

[adictd2tkdgirl]

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.

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

 

[SFC JeffJ]

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

 

[stickarts]

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.

 

[Flying Crane]

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?

 

[stickarts]

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.

 

[Flying Crane]

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?

 

[stickarts]

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.

 

[Flying Crane]

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.

 

[Brandon Fisher]

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.

 

[Ceicei]

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