Frequently Asked Questions (FAQ)

General Q's...

  1. What types of ownership are available?
  2. What is required to work in Japan?
  3. What makes a Smith's School of English successful?
  4. What type of background would best suit me in owning and operating a Smith's School of English?
  5. What type of students can I expect in my classes?
  6. What kind of demand is there for English instruction in Japan?

Start Up Q's...

  1. What training is provided?
  2. Is it possible to own a franchise but not actively teach at the school?
  3. Where do I open my school? or Can I choose my own location?

Marketing Q's...

  1. How are students attracted to the schools?
  2. What advertising does head office look after?
  3. What can I do to attract students to my own school?
  4. I'm not a salesperson nor am I good on the phone, so how can I get students to enroll in my classes?

Financial Q's...

  1. What is my initial Investment?
  2. What does the initial Investment cover?
  3. What additional expenses can be expected in setting up my Franchise?
  4. What is the cost of living in Japan?
  5. What can I expect for income from my Smith's School of English Franchise and where will that income come from?
  6. What are the tax implications of owning a franchise in Japan?
  7. How much are the ongoing franchise fees?

Administration Q's...

  1. How are the classes structured?
  2. What about the curriculum?
  3. What days are the schools open,and what holidays are recognized?

Q's about the Future...

  1. How long is my franchise contract?
  2. What if I want to expand and purchase additional schools / locations?
  3. If I decide this isn't for me how can I terminate my contract?

Responses:

General...

  1. What types of ownership are available?
    To date all schools are located in Japan. The majority of operational franchises in Japan are run by the owner of the franchise. Others fall into one of three investment categories...

    1. Single school owner operator. Hands-on: :Some franchisees like it that way. They do it all themselves. Some have full-time teachers and only patch in the part-time support themselves. Others expand and need the support of additional part-time teachers. Some don't work in their own classrooms at all. It really is up to you.
    2. Multiple School Investor: Multiple school owners by necessity require the assistance of another. They cannot be in two places at once. They support the needs of their PST (profit share teacher) and enjoy an income from their multiple locations.
    3. Passive Investors: These investors need not be in Japan. They [passive investors] have put up the investment capital, supported the cash flow needs of the start up operation. The day-to-day operations are handled by an appointed PST. Smith trains and installs the PST. They derive passive income from the school while remaining at home in New York or Brisbane. While it is true they do not have to actually participate in the day-to-day running of the business, it can be fun staying in touch with the decision-making process. Email empowers them to converse with their PST on a regular basis. They discuss issues and have the "final say." They enjoy the investment. With minimal financial exposure they get to be "armchair presidents." Of course they stand to make a pretty fair ROI and at the end of the day can always exit by selling the school.


  2. What is required to work in Japan?
    There are a number of ways to get a visa to work in Japan. If you are married or a dependent of a Japanese national and have no detrimental previous history, you are eligible to apply for a spousal visa. You will need evidence of your spousal relationship. Apart from that, Smith's can provide all other required documentation and manage the submission of your spousal visa. The spousal visa will allow you to work in Japan.

    If you are not the spouse or dependent of a Japanese national, one of the most common requirements of the Japanese Immigration department is a bachelor's degree or its equivalent. This will make you eligible to apply for a working visa.

    In the event that you have neither a bachelor's degree nor are you the spouse of a Japanese national, you will need to discuss your educational and vocational history in depth with Smith's immigration specialists.

    Do not be put off by not having any formal qualifications. You may still be eligible. Smith's team of immigration specialists have successfully managed and submitted several work visas that, on the surface, did not meet the minimum requirements.

    There is no limit to the number of times you may reapply for your working visa. There is no maximum period of stay, provided that you continue to comply. The duration of each visa granted is usually between one and three years. Smith's will facilitate and support all applications for extension. Smith's is also able to facilitate and support the application for permanent residency for those who desire.


  3. What makes a Smith's School of English successful?
    Smith's School of English franchisees are coaches of communicative confidence to nonnative speakers of English. The majority of our students are "false beginners." Which means that they have undertaken grammatical studies of between three and six years. They may have even continued their studies at university. They are usually able to read and write quite competently; however they have little or no verbal skills in English. Our mission, in a nutshell, is to take their original base of knowledge and coach out their verbal communication skills.

    There are two main facets of the job as a franchisee:

    1. Attract and place new students into the system.
    2. Minimize attrition rates by providing a professional, supportive environment for the students to learn.

    These are the most important aspects of owning a Smith's school. If you can master these skills, you will be successful. By providing full training on these and other areas, Smith's head office team is always there to assist you in reaching your personal goals. In addition to this, Smith's offers regular seminars and specialized training events to facilitate your success.


  4. What type of background would best suit me in owning and operating a Smith's School of English?
    Our franchisees come from all walks of life and vary greatly in age. We embrace diversity in our schools and have franchisees with backgrounds in a number of fields including, high school English teacher, surveyor, dentist, road maintenance, carpenter, international lumber representative, tour bus driver, and attorney. The age of our franchisees ranges from a very young 21 to our seniors up to 72 years of age. 25% of our coaches exceed 50 years of age.

    Many of our franchisees started out with zero Japanese language skills. The Smith's system enables native English speakers with no Japanese skills to establish themselves and their schools in Japan. It is argued that many students prefer teachers with no Japanese skills. Smith's does suggest that coaches do pick up some basic skills if only to enrich their stay in Japan. However, English newspapers and several English magazines are available as regular publications in Japan. Bookshops also carry a variety of English books.


  5. What type of students can I expect in my classes?
    Our main focus is toward young adults with about 80% of all our student base being comprised of young adults, and more than half are female. This has traditionally been our market as this group not only has the money but also the time to study. More recently we have seen a growing number of mature students entering our schools, and a greater percentage of men. In addition to this we are beginning to see a rapidly growing trend in interest from the children's sector. Smith's does not advertise directly to children with our mainstream advertising; however we do offer curriculum and sales support to those franchisees who are interested in working in this growing sector.


  6. What kind of demand is there for English instruction in Japan?
    Are English classes in big demand in Japan? Yes. The ongoing sad economics of the country tends to push them to education. English is of utmost importance to this island. They know that. As jobs get tougher, they get tougher. They find ways to make themselves more attractive to employers. English works. Our company opened at the start of the recession and we have grown continuously ever since. Demand is so great for English lessons in Japan that the Japanese government actually reimburses students taking English lessons 40% of their tuition costs. Only the best and most reputable English school systems in Japan meet the government criteria for consideration for this reimbursement. As of September 27th 2002, Smith's School of English is proud to be a member of this elite group


Start Up...

  1. What training is provided?
    Smith's provides full initial and ongoing training in administration, curriculum, and teaching. Initial training lasts for three full-day sessions. The pace is pretty quick and homework is offered. You must get through this training before you can begin teaching students. Franchisees regularly take advantage of the voluntary ongoing training sessions with an eye toward honing their skills and keeping up-to-date with the latest coaching techniques. These training sessions are free, so take advantage of them.


  2. Is it possible to own a franchise but not actively teach at the school?
    Yes; for different types of ownership, click here.


  3. Where do I open my school? or Can I choose my own location?
    Franchisees work for themselves or pay for someone to work their classrooms. They choose the area they wish to open. Unless, of course, they purchase an existing school. In some cases, start-up franchisees offer their services to teach within other franchises and be paid for the work they do in the classrooms. This option is for those who wish to earn some money to offset expenses in those start-up months. They usually move away from this kind of work within a short time as their own student body increases to the point of self sufficiency. In the event that this is attractive to you, the schedulers would endeavor to introduce work options close to your franchise location. You would need to consider this up front and locate within a hub of existing franchises.


Marketing...

  1. How are students attracted to the schools?
    Students are attracted to our system using a number of methods. These avenues include:

    • Mass media advertising done by Smith's head office. (Kansai area)
    • Flyers passed out at public transportation hubs by franchisees.
    • Letterbox deliveries performed by franchisees.
    • Word of mouth, via existing and past students and those who have heard of our school and recommend it.


  2. What advertising does head office look after?
    Smith's makes no guarantees that all of our advertising will be successful in attracting students but our efforts combined with local promotion by the franchisee is a powerful tool. Smith's head office is responsible for mass-media advertising. Which will result in potential students contacting the main office in search of a location to take lessons that is near their home or job. Smith's head office staff will determine which school has generated the sales inquiry and passes the information along to that franchisee.


  3. What can I do to attract students to my own school?
    Franchisees are responsible for local promotion. Local promotion may include attending local functions in the community, getting around to the local shopping center and making yourself visible. Small things like always using the same barber, for example, and expecting that he will send along anyone who's a prospective student is a good option. (If he doesn't, well then...change barbers!)

    We advise taking an active role in local school events. Find out when they are having the sports day and just turn up ready to help. There is always a lack of volunteers at school events. Your help will be appreciated and your networking will be bolstered. Stay until the last group is packing up and you will not be forgotten.

    One of our most successful methods of local promotion involves spending time handing out leaflets at the hubs of public transport. In Japan, public transportation is how most of the people get from place to place and flyer handouts can be quite effective.

    Another method utilized by our franchisees is a methodical and prolonged distribution of leaflets into letterboxes.

    All of these local promotion techniques are cheap and work well. Training in each of the local promotion disciplines will be provided by Smith's head office staff. In order to maximize the potential of your franchise, your own efforts in regard to these simple methods of local promotion are paramount.

    Should you feel that you in any way would be unable or unlikely to undertake the kind of local promotion as outlined above, we would suggest that it is better for you to go no further into your consideration of this opportunity.


  4. I'm not a salesperson nor am I good on the phone, so how can I get students to enroll in my classes?
    All sales are handled directly by Smith's professional head office team. Franchisees are not required to handle or close sales. Smith's maintains a highly trained and skilled sales staff of bilingual Japanese nationals specifically for this reason.

    All telephone calls to our schools are routed through one single national toll free number at the head office. The head office team manages all inquiries, not only calls generated by mass-media advertising but also as the occasion arises, when a franchisee is approached on the street or at a social event. These calls are always deferred to the head office and most of our franchisees carry some form of mobile communication to facilitate immediate response from the head office team.


Financial...

  1. What is my initial Investment?
    The initial purchase investment for a Smith's School of English Franchise is US $15,000


  2. What does the initial Investment cover?
    This covers your geographically exclusive agreement with Smith's. Smith's School of English franchise agreements are transferable and perpetual. Provided you keep running the school, there are no periodic renewal fees.

    Your franchise investment includes:

    1. Initial curriculum
    2. Administrative and teacher training
    3. Application for Japanese work visa
    4. Search and administration of contracts for a rental premises from which to work and live.

  3. What additional expenses can be expected in setting up my franchise?
    As with any other business venture, the costs associated with opening and running a Smith's School of English franchise will vary and are directly tied to the discretion of the incoming franchisee. The costs will vary greatly depending upon the style of premises to be opened. The majority of our franchisees begin with a single location that serves the residential and business needs of that franchise. As a base for consideration in the Kansai region, a typical 2-bedroom apartment of about 70 square meters will rent for about 70,000 yen monthly. Smith's will negotiate permission to operate a small business and reside at the same site.

    The costs to set up a single classroom with a dual purpose (residence and business) contract enabling a teacher to live and work from the same premises would be 720,000 yen of the budget mentioned on the previous page for most major cities in Japan. This figure would enable a relatively small living/working environment. This option is quite popular as a medium budget, single teacher start-up. By comparison, a location with a nice plate glass window, downtown and close to a prominent train hub contracted for the exclusive purpose of teaching and sized to accommodate up to three classrooms may cost from 2,500,000 and 5,000,000 yen fully outfitted. It is safe to say that a single-classroom, single-teacher environment will run operational monthly costs including rent in the area of 199,000 yen per month.


  4. What is the cost of living in Japan?
    The cost of living in Japan is comparable to most major cities throughout the world. An inexpensive lifestyle excluding rent can run as little as 40,000 yen per month. This would allow you to eat, get around, and pay for your day-to-day needs quite well. Entertainment can cost a lot however, and this is at the discretion of the individual. Depending on how and where you shop, you are able to live quite well. Most of our new franchisees tend to focus mainly on the development of their schools in the first year or so of business. However, for those who do like to get out and about, the cities of Japan offer a fantastic variety of free entertainment. Osaka city has a population of around 8 million so you can be sure that there's always something to do. If you take the time to look around at some of the economical options, your entertainment need not cost all that much. The train system within Japan is one of the leading systems in the world, you will not need to worry about transportation. This fabulous system will take you wherever you want to go in Japan.


  5. What can I expect for income from my Smith's School of English Franchise and where will that income come from?
    Smith's School of English franchise system is not designed for those who expect for whatever reason to be making monthly incomes in the six-figure range in the first year of operation. Our business operating system is based on the premise that life rewards effort, and the phrase "get rich quick" does not enter our vocabulary. If this is what you are looking for, you can stop reading here. What we do provide however, is a substantial return on your investment and a fulfilling lifestyle. It is extremely tax friendly and our system is easy to operate. It provides high levels of self-esteem for a job well done.

    One of the first questions you will be asked upon contacting Smith's School of English is in regard to your own initial level of financial expectation. Be sure that you give this some serious thought before calling.

    Our system has proven to be able to supply a very solid return on investment, provided that equivalent effort is undertaken by the franchisee.

    Income from your franchise is generated in two ways:

    1. Student joining fees 20,000 yen
    2. Tuition fees
    3. Commissions on offshore study programs

    The law in Japan prohibits us from making income claims. We can tell you that we can enroll up to three students in a class. Each of them could be paying 3250 yen per lesson.

    One of these "full" classes would bring in 9750 yen.

    Standard student contracts are for a minimum of 4 lessons per month.

    There are a maximum of 51 lesson times available per week for each franchise classroom.

    You can do the math, based on your initial levels of financial expectation and the amount of effort you are prepared to commit to your school.


  6. What are the tax implications of owning a franchise in Japan?
    Taxes in Japan are extremely small business friendly. For example: Smith's franchisees are all registered sole trader enterprises. As such they are afforded taxable deductions which are unheard of in most other developed capitalist economies.

    While taxes vary according to marital status and dependents, we can say that the tax system in Japan is very friendly. To further break it down, a single person with no dependents earning a net income of 4,500,000 yen per year will pay no more than 5% income tax. Medical insurance covering 80% of fees would be about another 5% and city taxes would be about 1.5% giving a total of about 12% on the 4,500,000 yen. You would pocket somewhere around 4,000,000 yen. In addition to this, as a franchise owner, many other costs may be claimed as business expense. For example, 100% of your "business motor vehicle" is often accepted without log books or any other records. Meals which you consider to be of a business nature are most often accepted as legitimate expenses. Airfares for trips back home which are of a research nature can be claimed. Small business firms are not required to pay consumption tax or any other kind of goods or service taxes. There is a General Sales Tax of 5% but the responsibility of collecting this is legally left at the feet of the larger businesses. While Smith's head office is required to pay the 5% tax, none of our franchisees to date have crossed the threshold. Remember you are no longer an employee. As an employee, your income determines your tax. As a private business, taxes due are determined by expenses, and that is the key.


  7. How much are the ongoing franchise fees?
    You get a lot more than just the name. However the short answer is: You need to calculate two expense categories to Smith:

    1. The monthly administration fee is about 60,000 yen
    2. Royalties are dependant upon school turnover and become less as income grows.

Administration

  1. How are the classes structured?
    Smith's organizes its students into five levels of proficiency from beginner to advanced. Adult classes are a minimum of one student with a maximum of three students. Children's classes are offered only at schools where the teachers have expressed interest in teaching children and start with one student with a maximum of six students.

    Our classes last for 45 minutes per session. They start on the hour and finish at a quarter to the hour. This offers a minimum of 15 minutes to break between each session.

    The standard student contract allows the student to study once per week with a total of four lessons per month. Recently we have seen a trend amongst students toward a more aggressive lesson schedule taking more than one lesson per week. It is not unusual to see these students taking anywhere from 2 to 6 lessons per week.


  2. What about the curriculum?
    Smith's has developed an exclusive and ever-evolving curriculum. In your initial three full-day training sessions, you will be taught our methods and curriculum. You will become proficient in our coaching method before opening your school. We do use textbooks but do not charge students for the use of materials. We require that all students keep a book of classroom notes. A well-kept notebook will, in fact, eventually become a very useful tool for review and continued development.

    All teaching materials to be used by the franchisee will be supplied in the initial startup kit, the cost of which is included in the initial franchise investment.

    All administration materials needed by the franchisee are also provided in the initial startup kit and costs are covered by the initial franchise investment.

    Administration training will also be supplied in the initial training sessions.


  3. What days are the schools open, and what holidays are recognized?
    Smiths Schools do not open Sundays or National holidays (15 per year). We also close down for Golden week in May, Oborn in August, and Oshiyogatsu in December / January. Students' lessons are considered and where necessary, Smith's administrative staff will negotiate "make up lesson" times with your students to ensure they take their lesson and thus there is no reduction in income to the franchisee. In total between April 2001 and May 2002 with no effect on income, Smith's closed their schools for a grand total of 95 days off.


The Future...

  1. How long is my franchise contract?
    The franchise contracts are perpetual. No renewal fees. Once you're in, you're in. Smith's provides several profitable exit strategies, but you only use them should you choose to. Two examples: You could sell up and move on (Buy Build Sell), or you could put the school under management (Buy Build Manage) and move on enjoying the passive income sent to you each month.


  2. What if I want to expand and purchase additional schools / locations?
    Smith's has several multiple franchises owners. We have seen our franchisees start in sometimes very small apartments and then have had the privilege of supporting their expansion into multiple classrooms operating from prime business space. This is what we love to do. Make you successful. Open your first franchise and once that location is up and running and successful, purchase another area and expand your existing profit center.


  3. If I decide this isn't for me, how can I terminate my contract?
    Simply put, be fair and give 90 days notice. Below are the considerations:

    Notice to terminate is ninety (90) days. That is, three full calendar months notice is required of any desire by the Franchisee to terminate this agreement.

    The Franchisee may sell his or her school on the open market, given that appropriate notice to terminate has been given.

    The Franchiser (Smith's School of English) reserves the right to refuse permission to sell. This right will only be exercised in the event that the a prospective purchaser is considered by the Franchiser to be detrimental to Smith's enterprise (e.g. the franchise cannot be sold to a competitor).

    Should the Franchisee wish to quit the Smith's School of English Franchise agreement but not wish to sell the franchise title and in so doing effectively quit the franchise but keep the location and student body then: 1.) reasonable notice of 90 days must be given or the equivalent of three months administration fees be paid. 2.) That the equivalent of an average of the previous six months monthly turnover be used to calculate royalties for the 90-day period of notice. And that standard royalties be paid as calculated against the above described average for the three months (90) days notice period. 3.) The franchise title reverts to the company and may be resold. 4.) The Franchiser will receive a separation allowance of 50% of the calculated goodwill value of each student. This value will be determined by the Franchiser and at time of writing is indicated that value is JPY100,000 requiring a separation allowance of JPY50,000.

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