On today’s topic, the business model for GABA Eikaiwa works like this:
1) Rent facilities.
2) Hire native English speakers under the most ambiguous of terms. Create a bureucratic maze of flat-rate hourly payments.
3) Market to Japanese who want to learn or practice English, and charge them more than what the rent, other overhead, and money you pay out to the native English speakers cost you.
4) Because previous competition has already imploded under the pay-by-deposit for future lessons method, try to offer lesser discounts for services not too far into the future.
As you can see, this would be a touch-and-go type business. If the customers show up that month, you have a business. If they don’t, you don’t have the revenue. Your revenue streams aren’t dedicated in any way, in fact. So to make the business model work, you need to blur the distinction as to whether your employees are really employees.
After all, what is the product? A talking gaijin. The atmosphere of the Learning Center. How is this any different than the freelancing Eikaiwa teacher doing “privates” at the Jonathan’s or the Dotour’s? When you strip away the marketing and the talk about “training” and “methods”, the product is really the freelance private model. Except you are telling the freelancer what to wear, when to show up, and what to do. (So in that sense, it’s more like McDonald’s.)