Virtual Roundtable----Contracts or Open Ended Agreements?
A school that due to offering open-ended agreements is having a summer they will never forget inspired this discussion. Why will they never forget it? Because they had 27 people freeze for the summer (their policy allows the students to stop paying). Even with summer camps they have been working more hours, offering more classes, making less money and are stressed out!
Does this sound familiar? Do you offer open-ended agreements? Do you have contracts? What is your take on having open-ended agreements or having contracts?
Does this sound familiar? Do you offer open-ended agreements? Do you have contracts? What is your take on having open-ended agreements or having contracts?
Tags: agreements, contracts, ended, open, or
Views: 12
Replies to This Discussion
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Permalink Reply by Larry Sanders on -
We have agreements that auto renew and in that agreement it is very carefully worded that just because they go away for summer vacation their payments will not stop. We carefully read each member this upon enrollment and have them sign it in agreement. Summer is good.
Larry Sanders
Sanders Black Belt Academy
Austin, Texas
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Permalink Reply by Sifu Stephen Mcdonald 斯蒂芬 麥克唐納 on
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Myself My schools no longer use them. We did use them from 1990 to 1997. We stoped after doing a 30TO 60 day Surveys with the general public of about 550 people. On the use of membership contracts, the majority results came back that Many people prefer not to use or be obligated to use such a service like contracts, due to many fears of Example Lost of job, loss of interest for their children or, themself, Residential or job relocation,Injuries and trying to stop/ freeze on fee/s until recovery,or Hidden fees that arise later during training.. Ext..
However the people who compleated the surveys did understand the purpose or / reasons of Survival of the martial Art industries of contracts, but they also thought there should be a more perfected manner of an exception due to circumstances. further stated that the free 2 or 3 day trial or week and two week trial that many schools offer just wasn’t enough time to weed out future outcomes, intrest loss and other situations.
Most schools in theTennesse areas still use open-ended agreements, and contracts, Not sure how it is working out for some of them, But i know some are on the verge of closing down, due to contract issues and fee hikes.
My schools in that area has has had an amazing Increase in students and a very low turn around on student loss, some stated on signup that they feel a more secure and protected Financial environment, like gold’s gym or the YMCA you have a choice between month to month,( may have to pay an higher fee or pay upfront first and last month fee), or use of a contract.
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Permalink Reply by Master Richards on -
Contracts are the ONLY way to go! Our contracts are $17K and run for 36 months. Now, with this in mind, you only need 100 families to get you to $1.7 Million. This is just a taste of what we do!!!
If you need more info on contracts, please do not hesitate to contact me.
Hope this helps.
Thanks, Master Richards
MAST
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Permalink Reply by Sensei Nick on -
Very interesting so far.
2 for contracts, 1 against.
Please note this is a discussion, please contribute ideas and suggestions for other school owners. So lets here more information on experience and why you think contracts are good or bad.
I plan to contribute after my 2 pm meeting.
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Permalink Reply by Sensei Brooklyn on -
First of all we don't use the "C" word, it's like a swear word in our school. We prefer to use the less aggressive word "agreement" because that is more suitable to what we are embarking on. We, the school, are agreeing to teach them and guide them for each of their 24 month "programs" and they, the student, are agreeing to come to class, try their best and never give up (oh and lets not forget, paying us as well ;)
Now that I've obviously shown where my preference lies, let me tell you why.
Martial Arts schools, successful or successfully in the making, may have different programs, prices and teaching methods but they all should be teaching the same philosophy. That philosophy is simple in thought yet difficult in action, COMMITMENT & DISCIPLINE, which is one reason we use "agreements" to help be the basis in the students progression and ultimately, the schools success.
Champions offers month to month programs at an inflated price or 24 month programs at a discounted price and it is the job of the PD to sell and properly educate the new future black belt. However, with that being said, i also believe that if we do our job correctly we can successfully conquer any objections that come up before we even sit down for the enrollment. Then if we clearly inform them that time missed is up to them to make up or extended time missed gets credited at the END of the agreement then when they forget, and they will, it's as easy as just reminding them of our initial conversation.
Also, in my opinion and experience, open ended agreements just make you work harder.
Humans are creatures of habit. This means that the same objections and flaky nature will always be either a topic of discussion or an obstacle to deal with, which is why martial arts is so popular. The number one and number two New Years resolutions every year are "quit smoking" and "go back to the gym"....WHY?? NO DISCIPLINE! and it's our job as "Life Coaches that teach martial arts" to change that. By practicing martial arts they will learn how to take on new things without being overwhelmed, juggle multiple "balls", not sacrifice one thing for another and never give up! Don't worry about potentially losing your job, we will provide you with training in focus, discipline and self confidence so that you can solidify your position where you are at or go out and find a better one.
However, as "life coaches that teach martial arts", we need to be understanding and reasonable as well. No matter how large your school is it's not as large as a Fitness World or 24 hour fitness, which means we can't just give them the middle finger and send them to collections when they either break the agreement or try to break the agreement. Make exceptions when needed and the buzz about your school will be more positive than negative. Remember, we are in a customer service business which means think less about buying the new Beemer and think more about servicing your students needs. When they are happy, we are happy. When they are not, well we've all been there.
Hopefully my feedback was helpful and if you have any further questions please feel free to contact me.
James R. Jongkind
Champions Martial Arts Academy
North Vancouver, BC CANADA
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Permalink Reply by Noelle Disabunjong on -
Contracts are the way to go. You have to be confident enough that your program is worth the extended amount of time. We teach students an art, which cannot be taught in 30, 60, or even 90 days. It takes time and dedication for a student to learn what we teach and the first step should be getting over fear of commitment!
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Permalink Reply by Shihan Nick Bajra 7th Dan on -
Master Richards said:Contracts are the ONLY way to go! Our contracts are $17K and run for 36 months. Now, with this in mind, you only need 100 families to get you to $1.7 Million. This is just a taste of what we do!!!
If you need more info on contracts, please do not hesitate to contact me.
Hope this helps.
Thanks, Master Richards
MAST
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Permalink Reply by Shihan Nick Bajra 7th Dan on
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Very nice, what kind of contract you are using and how much do you charge per month? I will like to know if you can tell me. Thank you very much from Shihan Nick bajra
James Jongkind said:First of all we don't use the "C" word, it's like a swear word in our school. We prefer to use the less aggressive word "agreement" because that is more suitable to what we are embarking on. We, the school, are agreeing to teach them and guide them for each of their 24 month "programs" and they, the student, are agreeing to come to class, try their best and never give up (oh and lets not forget, paying us as well ;)
Now that I've obviously shown where my preference lies, let me tell you why.
Martial Arts schools, successful or successfully in the making, may have different programs, prices and teaching methods but they all should be teaching the same philosophy. That philosophy is simple in thought yet difficult in action, COMMITMENT & DISCIPLINE, which is one reason we use "agreements" to help be the basis in the students progression and ultimately, the schools success.
Champions offers month to month programs at an inflated price or 24 month programs at a discounted price and it is the job of the PD to sell and properly educate the new future black belt. However, with that being said, i also believe that if we do our job correctly we can successfully conquer any objections that come up before we even sit down for the enrollment. Then if we clearly inform them that time missed is up to them to make up or extended time missed gets credited at the END of the agreement then when they forget, and they will, it's as easy as just reminding them of our initial conversation.
Also, in my opinion and experience, open ended agreements just make you work harder.
Humans are creatures of habit. This means that the same objections and flaky nature will always be either a topic of discussion or an obstacle to deal with, which is why martial arts is so popular. The number one and number two New Years resolutions every year are "quit smoking" and "go back to the gym"....WHY?? NO DISCIPLINE! and it's our job as "Life Coaches that teach martial arts" to change that. By practicing martial arts they will learn how to take on new things without being overwhelmed, juggle multiple "balls", not sacrifice one thing for another and never give up! Don't worry about potentially losing your job, we will provide you with training in focus, discipline and self confidence so that you can solidify your position where you are at or go out and find a better one.
However, as "life coaches that teach martial arts", we need to be understanding and reasonable as well. No matter how large your school is it's not as large as a Fitness World or 24 hour fitness, which means we can't just give them the middle finger and send them to collections when they either break the agreement or try to break the agreement. Make exceptions when needed and the buzz about your school will be more positive than negative. Remember, we are in a customer service business which means think less about buying the new Beemer and think more about servicing your students needs. When they are happy, we are happy. When they are not, well we've all been there.
Hopefully my feedback was helpful and if you have any further questions please feel free to contact me.
James R. Jongkind
Champions Martial Arts Academy
North Vancouver, BC CANADA
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Permalink Reply by Sensei Nick on
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Everyone makes really good points. I would like to hear more from schools that have been successful with open-ended agreements. If you have a school with open-ended agreements in place successfully, please share your thoughts in the discussion.
There is a great article in Entrepreneur magazine that all school owners and program directors should read. It is on page 26 of the August issue. It is called "Take Out the Garbage." It focuses on what not say when working in sales. It applies so well to us because a "membership agreement" or "contract" is just that, it is sales. There are different methods of sales. If your method is working, and you can sleep at night knowing that your sales techniques are ethical and successful at the same time, then by all means, keep doing what you are doing.
We have all had students that want to quit, but had filled out a contract or membership agreement and did not think they were obligated to continue to make payments. Was it explained to these students when they signed that piece of paper that it was a contract (i.e. legally binding)? I was also taught these "secrets" of filling out an agreement where the prospective student is told it is just a “membership agreement,” and to "just ok" at the bottom. The problem with that is that the student is lead to believe the agreement is non-binding. Then, in three months, when he or she wants to quit, what do you do? You were not clear and that is your problem, not the student’s. This is why it is important to be upfront when running a business.
My opinion on sales systems is simple: sell with Integrity! It will never let you down. The staff member that signs the student up should be honest and stand by what he or she told the person at enrollment. If the staff member told the student that he or she can cancel if there is a problem, the student should be allowed to cancel. If the staff member told the student that his or her agreement is effective for 12, 24, or 36 months, the student must make regular payments even if he or she quits. The same goes for cancellation fees. If the student was told a cancellation fee would be charged in the case of early cancellation on the agreement, stand by that statement.
In regards to open ended agreements, I firmly believe that when I first opened my school it was the primary reason that I was trapped at 150 students for a year. When I made the switch to Champions Way and started billing-direct, there were about 40 people that paid in-house. I then decided to make the decision to no longer accept in-school payments. There were some parents that were not happy, and a few quit. At that point, I also began implementing 12- month agreements. From that day on, I never looked back. It was the best thing I ever did.
More importantly, three years later, when I decided to build my own custom building, I went to the bank for a loan. The bank wanted to come to my school to see my operation. I will ever forget that day. I was in my office and the agent asked me how we bill our students. I told the agent that we used auto debit. He asked me what the length of the agreements was. I told him 12 months. He went a step further, and asked me to show him the agreements. We went through over 200 agreements, and he was really impressed. He said that he thought my numbers were more accurate having seen it first hand. The moral of the story is that a year and a half later, after being stressed out with builders, the planning board and engineers, I was in my very own, brand new building.
What if the agreements were open-ended? Would I still be renting? I guess I will never know.
Lets keep it going...
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Permalink Reply by Rob Pendergrass on -
Nick, so do you only do auto drafts. Do you or any of you other guys only accept billing direct payments. So, no cash/checks? What about cash outs? Just curious.
nick dougherty said:Everyone makes really good points. I would like to hear more from schools that have been successful with open-ended agreements. If you have a school with open-ended agreements in place successfully, please share your thoughts in the discussion.
There is a great article in Entrepreneur magazine that all school owners and program directors should read. It is on page 26 of the August issue. It is called "Take Out the Garbage." It focuses on what not say when working in sales. It applies so well to us because a "membership agreement" or "contract" is just that, it is sales. There are different methods of sales. If your method is working, and you can sleep at night knowing that your sales techniques are ethical and successful at the same time, then by all means, keep doing what you are doing.
We have all had students that want to quit, but had filled out a contract or membership agreement and did not think they were obligated to continue to make payments. Was it explained to these students when they signed that piece of paper that it was a contract (i.e. legally binding)? I was also taught these "secrets" of filling out an agreement where the prospective student is told it is just a “membership agreement,” and to "just ok" at the bottom. The problem with that is that the student is lead to believe the agreement is non-binding. Then, in three months, when he or she wants to quit, what do you do? You were not clear and that is your problem, not the student’s. This is why it is important to be upfront when running a business.
My opinion on sales systems is simple: sell with Integrity! It will never let you down. The staff member that signs the student up should be honest and stand by what he or she told the person at enrollment. If the staff member told the student that he or she can cancel if there is a problem, the student should be allowed to cancel. If the staff member told the student that his or her agreement is effective for 12, 24, or 36 months, the student must make regular payments even if he or she quits. The same goes for cancellation fees. If the student was told a cancellation fee would be charged in the case of early cancellation on the agreement, stand by that statement.
In regards to open ended agreements, I firmly believe that when I first opened my school it was the primary reason that I was trapped at 150 students for a year. When I made the switch to Champions Way and started billing-direct, there were about 40 people that paid in-house. I then decided to make the decision to no longer accept in-school payments. There were some parents that were not happy, and a few quit. At that point, I also began implementing 12- month agreements. From that day on, I never looked back. It was the best thing I ever did.
More importantly, three years later, when I decided to build my own custom building, I went to the bank for a loan. The bank wanted to come to my school to see my operation. I will ever forget that day. I was in my office and the agent asked me how we bill our students. I told the agent that we used auto debit. He asked me what the length of the agreements was. I told him 12 months. He went a step further, and asked me to show him the agreements. We went through over 200 agreements, and he was really impressed. He said that he thought my numbers were more accurate having seen it first hand. The moral of the story is that a year and a half later, after being stressed out with builders, the planning board and engineers, I was in my very own, brand new building.
What if the agreements were open-ended? Would I still be renting? I guess I will never know.
Lets keep it going...
-
Permalink Reply by John Fulton on -
If your not doing contracts your probobly telling your students that you don't need them because your classes speak for themselves and thats how good your classes are and so on.... well thats a sales trick to get them to sign up which is what we all care about. If contracts was the answer to super success then we would all do it regardless if we truly beleieved our classes were so good we didnt need those agreements. Its a neat sales feature to say I don't have contracts because our classes are that good. If you feel that saying that will sign you up more people then you will loose because of your lack of contract use then your doing awesome. But its all business either way.... I find that they come in handy when you bust your butt for the kid but he wants to quit because hes lazy. And in my area the parents let the kids run their own lives unless its going to cost them money then they force them to go and a miraculous this happens, they get re-interested. Was it my boring classes that need contracts because they arent exciting like the no contract school's classes? No it is just kids being kids. If your classes are truly good then, if talking about principle, you should have contracts because you are doing that child a diservice letting them quit when it gets tough. I use them and it has been the best thing for me and my students.
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Permalink Reply by John Fulton on
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You charge over $400 a month????
Master Richards said:Contracts are the ONLY way to go! Our contracts are $17K and run for 36 months. Now, with this in mind, you only need 100 families to get you to $1.7 Million. This is just a taste of what we do!!!
If you need more info on contracts, please do not hesitate to contact me.
Hope this helps.
Thanks, Master Richards
MAST
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