Recently, Shutong English has set off a wave of store closures, almost all campuses across the country have been shut down, and the company has also been sued for debt disputes. A children’s English training institution that has been in business for more than 20 years, has more than 200 campuses and more than 200,000 students, has suddenly fallen into such a situation in a short period of time?
Shutong English closes stores across the country, the headquarters building is covered with labor arbitration response notices
When the reporter visited many Shutong English campuses in Guangzhou, they found that these campuses were all closed. The reporter then came to the registered address of Shutong English at No. 786, Fude Road, Panyu District, Guangzhou City. According to the insider, it used to be very lively with people coming and going, but now it has become extremely deserted, and the glass on the door is full. The announcement is particularly conspicuous.
Various notices of responding to suits are posted on the door, as well as a schedule of wages in arrears. The maximum amount of wages requested exceeds about 110,000 yuan.
Mr. Yu, a teacher at the Guangzhou Jiangpan Campus of Shuboy English: The default date of the payment of Shuboy’s wages will be from the 28th to the 31st of the following month, so my June wages will be paid at the end of July. The teacher’s salary has only been paid 5,000 yuan, which is equivalent to only half of the account. The salary of their consultant or principal is even later and less than that of the teacher. So we feel a little bit wrong.
The consultant mentioned by the teacher is Shutong’s salesperson. In addition to the arrears of wages, the issue of refunds for “learning cards” ranging from 30,000 to 50,000 yuan also worries them. According to the company’s internal regulations, consultants who have worked for six months must purchase a learning card that is similar to a security deposit but without any value. If you do not purchase a “learning card”, the consultant’s commission income will be discounted by 40%. In addition to consultants, branch school principals, vice principals, and some teachers who will be involved in sales will also purchase “learning cards.”
The wages paid by Shutong English to employees have been “discounted” since June this year, but the parents are not aware of this. Many parents also bought large packages in July, and Ms. Zhang is one of them. On July 11, Ms. Zhang purchased two study tours worth 39,880 yuan and 19,880 yuan for the two children.
According to the agreement, after purchasing a 39,880 yuan study tour package, before traveling, Ms. Zhang’s eldest son can enjoy the right to enroll in the Shuboy English International Class for free within the validity period of the 4-year agreement. There are 48 lessons per year, each time 2 hours. If you do not choose to travel after the expiration date, 80% of the package fee will be returned to Ms. Zhang.
For the 19880 yuan package purchased in addition, the agreement is valid from the day when the student first attends class until his junior high school graduation. According to the agreement, as long as Ms. Zhang pays an additional 2,980 yuan tuition per year for her youngest son in kindergarten, she will be able to enjoy 40 lessons per year for 10 years. If you choose not to travel to school after the expiration date, you can also refund 80% of the package fee. Ms. Zhang thought it was a good deal, so she spent a total of 62,660 yuan on these two packages. Unexpectedly, only the eldest son took 5 classes, and the younger son received the news that Shutong had closed the shop on a large scale before the class started.
Plans to open 1,000 branch schools, five years of listing, Shutong English crazy expansion road
During the interview, both parents and teachers affirmed Shutong’s courses and teaching results. The official website of Shutong English also revealed the organization’s vision for the next few years, “In the future, 1,000 branch schools will be opened across the country and landed on the capital market within five years.” However, it is the crazy expansion under this beautiful vision that has been caught by insiders. Think of it as a booster for Treeboy English to come to an end.
Xiaoya (pseudonym), head of admissions at a campus of Shutong English in Guangzhou: From 2017 to 2021, the number of stores has been increasing and more than 200 branches have been opened. The pace of their operations can’t keep up, and the taste of sales is getting bigger and bigger.
The “sales taste is getting bigger and bigger” mentioned by the head of the branch school has also been confirmed by many teachers. In order to increase revenue, not only the consultants in charge of sales, but also the teachers who usually attend classes are often dragged to “top the list.”
Ms. Deng, a teacher from the Guangzhou Xiying Campus of Shutong English: Based on their speaking skills, they called their parents and asked them to renew various projects. Employees must go. If they don’t, they will be kidnapped morally, saying that you have no team spirit.
In addition to stimulating employees to increase revenue, micro joining has also become a project strongly promoted by Shutong English. Shutong English is divided into directly-operated stores and franchised stores. Micro franchise is based on the total investment of the franchised stores and splits the equity into 18 shares. Parents purchase at least one equity and become shareholders. During the interview, the reporter learned that among the parents who joined the micro, there are also many who have more than one share option.
Last year, Ms. Wu spent 130,000 yuan to purchase an equity in a campus in Foshan, Guangdong. What annoyed her was that not only did she not receive dividends from the invested company in the first year of investment, but she also never even saw the campus where she invested. Financial statements.
Fang Biyun, attorney from Shenzhen Aitron Law Firm: We probably read the micro franchise agreement provided by the parents. From the terms of the agreement, it is difficult to judge whether this is an investment relationship or a franchise relationship. Because the agreement lacks the most basic elements. This agreement only stipulates that the investor will invest funds to establish a company to join the Shutong English campus, but it does not make a clear agreement on the operation and management of the campus, the distribution of income and surplus, and the burden of losses after the establishment of the campus. In fact, there are many flaws.
Expert: Blindly expanding the operation of “exhausted zeal and fish” is the main reason for closing the shop
After Shutong English exploded, some people in the industry pointed out that in terms of operation, the low customer unit price of Shutong English simply cannot cover basic operating costs. This “exhausted and fishing” operating model is destined to not be long-term.
Rongtong FundeducateIndustry researcher Ma Chunxuan: For example, if you sign up for a course of nearly 70,000 yuan, after 4 years of courses, there will be 80% or even 90% of the refund rate after the completion of the course. In this way, the four-year customer unit price is less than 7,000 yuan. It certainly cannot cover fixed costs such as rent and teachers’ salaries.
Industry insiders pointed out that the blind expansion of education and training institutions may cause their own teaching quality and operation management to fail to support. Only by ensuring that the profit model of its own stores and its management capabilities keep up with the pace of expansion can it expand steadily. If a company wants to go public, it also requires its financial status to be open and transparent.
Fang Biyun, a lawyer from Shenzhen Aitron Law Firm: In August 2018, the General Office of the State Council issued the “Opinions on Regulating the Development of Off-campus Training Institutions”, which clearly stipulates that when collecting tuition fees, off-campus training institutions should not charge more than three at a time Monthly tuition. The product method of Shutong English, which is a gold member and a diamond member, violates the regulations of the General Office of the State Council. Therefore, when parents report this kind of training courses to their children, they must have a preliminary investigation whether the charging methods of the products of the off-campus training institutions are legal and compliant.
Where did the tuition and franchise fees collected by Shutong English go? This is a common doubt between parents and Shutong employees. On October 13, the Shutong official account made a public response to related disputes for the first time, stating that the corresponding solution will be announced on October 30. The reporter called Li, the person in charge of Tree Boy English for many times, but was left unanswered. At present, many parents have chosen to report the case to the police. The reporter also contacted the Guangzhou police. The other party said that the case is currently under investigation and it is not convenient to disclose the details of the case.