terryl965 said:
Well at my school we do not or will not offer these kinds of programs, first off you can never say how long it will take,second you cannot forsee the future of the student health or your own as well, finally the thought of asking for a contract and giving a gaurantee on services is a joke
With the schools I'm familiar with, the contract (whether PIF or not) is only for a period of time; it has nothing to do with obtaining a particular belt level. The only "guarantee" is generally a locked-in price for the duration of the contract and a set training regimen.
For the school owner contracts or PIFs have the benefit of retention (especially for kids during the summer months), which provides a more known profit margin. Usually schools with pure month-to-month tuition see serious swings in attendance, which can make for some difficult months during the down season (the owner is still required to make the same lease payment for the building).
For the consumer, it can provide an incentive to keep going since they're paying (or have paid) for the classes already. Many students have slumps and decide to quit in the middle belt levels. This is another way to help the student learn perseverance, by helping them stick to a plan. And as I said, it locks in the price of the lessons, where others can raise their rate daily if they wanted to. Most service contracts have clauses that let you out of the contract if you move away or have some other sort of financial hardship. Most instructors have contracts (building lease) themselves so having one for the student makes sense.
A contract also instills in the consumer that the martial arts is not a seasonal hobby. It's something that will take a long time to master and requires some dedication. You proclaim that dedication when you have a contract.
Most consumers are used to the concept of a contract, we have leases for rentals, for cars, etc. And most health clubs have contracts. So almost everyone has one. Paying up front for a service is a little harder sell since most people are not familiar with that. At the moment I can't think of anything else that does this.
PIFs can be bad for the school if the money is spent before its time. Once it's spent, you're not getting any more money from that student. It takes a lot more financial management on the part of the owner.
PIFs are bad for the consumer simply because things come up: injuries, layoffs, moves. Make sure you have it documented under what conditions you can receive a refund.
I personally dislike contracts and especially PIFs, although that's how I trained. I'm a business softee and have a hard time charging someone for classes they are not taking. But I can see the benefits too. I've had several students give me a sob story and not pay only to leave with a hefty bill afterwards.
WhiteBirch