Ballroom Dance > When a teacher moves to another studio

Discussion in 'Ballroom Dance' started by DanceMentor, Aug 26, 2004.

  1. DanceMentor

    DanceMentor Administrator

    It seems that when a teacher chooses to move to a new studio, it can often lead to a lot of friction. I've seen some pretty emotional situations result.

    For example, let's suppose there is a teacher working for a chain studio like Fred Astaire or Arthur Murray who is teaching 35 hours a week, who wants to strike out on their own as an independent. If the students are paying $75/hour, then the studio stands to lose over $10,000 per month.

    So many things can happen. First the teacher can start telling their students about their plans to try to convince them to follow them to the new studio. Then maybe one of the students who is loyal to the studio tells management. The next day the teacher is told they are not to enter the building even though they had lessons scheduled. Then the studio starts calling all the teacher's students, and the teacher starts calling. Basically, it can get really messy!!!

    Is there really a good way to leave a studio for a teacher?
    What if they want to teach in the same town?
    Or want to go independant?
    Or want to start their own business?

    What should a studio do to protect themselves?
    Are non-compete clauses really enforceable?
    Should they fire the teacher as soon as they find out?
     
  2. robin

    robin New Member

    Hey, the US is the home of captialism, so the solution is very easy: If the teacher makes more money as an independent then that's what he should do, competition is always good ;).

    As for the studio protecting itself: Offer better working conditions. If they paid their teachers $40 an hour they would still make $35 profit, but the advantage of the teacher going independent would become very small, unless he fancies himself as a businessman rather than just a dance teacher (ie he would make money by hiring other teachers etc. rather than just through lessons).

    Anyway, this is the way markets work, if you start taking too big a margin, competition will spring up and take up the slack. I really dislike businesses who try to succeed by intimidating potential opposition. If a studio has a contract with a teacher it should let him teach until the contract is terminated, presumably with a notice period.

    I would hope that a business behaving in such a bad manner as you suggest would lose many of its customers (students) especially if they are mainly going there for the one teacher, rather than for the name of the chain...
     
  3. Purr

    Purr Well-Known Member

    I don't think the non-compete clauses are particularily enforceable.
     
  4. Joe

    Joe Well-Known Member

    Restraint of trade?
     
  5. Another Elizabeth

    Another Elizabeth Active Member

    The enforceability of noncompete clauses varies widely from state to state. In California, they are not enforced at all; in some other states, they can be very strong.

    Personally, I think it is very poor behavior for a teacher to start trying to recruit students for his next studio while he is still drawing a salary from the former one. I'd fire an employee who did this, whether he was a dance teacher, an accountant, or a salesman. Similarly, things like mailing lists can be trade secrets, and an employee who walks off with them when he goes to his next job is in the wrong.

    However, after he has left to start the next opportunity, there's nothing wrong with some targeted marketing, to try to get the students whose loyalty was to the teacher, rather than the school, to make the switch.
     
  6. Warren J. Dew

    Warren J. Dew Well-Known Member

    I think there are a couple of different things that people can think fall under a noncompete clause.

    In the strictest sense, an instructor prohibited from competing would be prohibited from setting up a new studio at all, even if he didn't recruit students from the old studio. Trying to get new students who were had never been in a studio at all would still be competing, since it targets the same potential market. This is the form of competition that it's very difficult to prohibit in most states. Noncompete clauses of this form are common in the software industry; I've even been told, "just sign it because it's unenforceable anyway." I would never sign one, though, because it would essentially be a promise never to work anywhere else again.

    Specifically recruiting one's former students for a new studio is rather more aggressive. I believe that in some states, this would be illegal even with no contract. If one has signed an agreement not to do this, I would consider it extremely unethical to ignore the agreement.
     
  7. robin

    robin New Member

    I think whether that is unethical or not depends very much on the circumstances. If for example the local legislation does not allow for non-compete clauses, the unethical thing is to make someone sign one in the first place. While it has no force in law, it is still meant to intimidate the employee. Personally I'm very much against non-compete clauses as they undermine the working of the free market and render the employees powerless in their relationship with their employer.

    I don't think there is anything wrong with trying to get ones former students as customers. It's the way of the world and it's the same in any service business. Whether you look at law, hair-dressing or dance teaching: Whereever the relationship of the customer is mainly with one individual rather than the whole business, they are likely to follow them if they set up shop elsewhere.

    I really see this more as a question of consumer choice. If I have been going to a specific teacher for a while and like him/her, I will enquire what happened to him and find out where he teaches now. It is unrealistic to assume that the students of one teacher will be equally happy with someone else regardless of who it is...
     
  8. Laura

    Laura New Member

    You can ask, but they don't have to tell you. I had a teacher simply up and disappear -- I called him to cancel a lesson, left him a message, and when I showed up for my next lesson I found out he was gone. I asked where he went and they said he just left. Turns out he left to go to a different studio in the area, but they weren't about to tell me that.

    You'd be suprised what some studios try to pull on beginning/social students who don't know any better yet.
     
  9. sunderi

    sunderi New Member

    There is another issue to consider: at the chain studios, the students themselves typically have a contract with the *studio*, not the instructor. (In fact, the contract I signed at my studio explicitly states that I am not guaranteed to dance with any particular instructor, and that the contract is still in force as long as they have *an* instructor for me to dance with.) So, in the situation you described, not only would the instructor be breaking their contract, but so would the student.

    This can be so complicated. The instructor would probably never have even HAD they students they have if they hadn't been part of the chain. People go do AMDS or FADS for the name of the *chain*, not typically because they're "in the know" enough to have chosen a particular instructor at that school. As time goes on, they may learn to understand enough to have a preference, but it was still the name of the franchise that got them in the door in the first place, and that does count for something.

    So, the instructor has gotten this collection of students without any personal advertising, having to pay any fees for use of the space, use of materials, their own training, etc. In my opinion, to then turn around entice students from the school is unfair and unethical. HOWEVER, if the *student*, of their own volition, looks up the location of the instructor, and chooses to take lessons there, I think that's fine. It is a free market, and we, as consumers, have the right to take our business to anyone we like.

    To answer the questions initially asked more directly:
    Yes, I think there's a good way to leave a studio for a teacher: use up the remainder of your contract and then move on when you no longer have a legal or financial obligation to the studio. That's just good capitalism.

    In my limited understanding of the AMDS world, at least, I think there would be issues with an instructor going independent and/or starting your own non-franchise business: due to the training they receive (at no cost) there is a certain "ownership" of that skill assumed by the franchise (again, though, as a student, I don't understand the details of this). Also, I know there are teachers that have left our school to go to independent studios, so maybe I'm wrong. I know that it's not uncommon for a franchise teacher to leave to work at another franchise with the full support of the management at both studios -- but again, I don't know how that works, either.

    I think firing the teacher when the management finds out about it is counter-productive. Even a teacher who wasn't planning on enticing students away from their old studio would be WAY more likely to, I think, if they had been treated unfairly by their old management.

    Just my perspective, as a franchise student. :)
     
  10. tasche

    tasche New Member

    I thik the moral of this story is that franchises and other studio that are similarly run should pay their teachers a decent wage rather than gouging the student and gounging the teacher at the same time =/
     
  11. DanceAm

    DanceAm New Member

    If a teacher is making 10,000 bucks a month, he/she could open his own studio. Our studio only costs about 3,300 in rent and utilities.

    But not every teacher has the discipline to go independant. Is that 35 hours being taught all existing students, is he/she getting fed new students by the studio? Getting new students as an independant means paying for your own marketing plan, that digs into the profits. Then he/she might have to train the staff so he/she doesn't have to do all the work in the studio. Then there is any benefits the chain studio might offer that the teacher will have to pay for on his own. Don't forget, the IRS, they will find you sooner or later.

    Here is the normal story in a teacher that comes to our independant studio. They come in with students found by the previous studio. They start making more money right away. Then they start teaching less, then they start getting lazy and cancel appointments, then they just don't bother to make some appointments. Then they have few or no customers and think this independant studio thing or owning your own studio is BS. Then they look for another job because the dance business treated them so bad.

    I don't know if it is immaturity, or the artist's mindset and being disorganized. But most teachers are lacking in maturity, organizational skills, discipline or a combination of all.

    Those who make it all have one thing in common, excellent customer service skills. You must take care of your customer or someone else will.

    Other things that help, motivated to get better and possibly consider competing with a partner professionally. This gives them reason to teach more, get more coaching to develop their own dance skills. They also remember that a guest program is their best way to keep up the student body. They keep dancing fun for everyone and have a positive attitude.

    Some teachers are better off in a chain studio where they get told what to do, when to do it and they don't have to think or plan on their own too much. They should concentrate on their dance, training, customer service skills, learn other aspects of the business, accounting, management and so on. Take some classes, because the dance business is still just a business where certain principles of success are the same. Make sure you are successful at taking students to the top levels of dance and competition. Then it is time to consider going out on your own.

    I have seen too many get too much money too quickly then lose everything. Going independant takes more work, not less work. But being on your own will be great when you are ready. Like any job, you must pay your dues and develop over time.

    As for non-competes, each state is different, but usually they cannot stop you from making a living, just from starting a competitive business. And if you take someone to court, the lawyers win.

    My advice, take care of your employees, you won't need a non-compete. If the employee lacks integrity, he/she will fail on their own anyway and you don't want them around.

    I think chain studios fail to see that the students develop a relationship with the teacher, a bond that a "building" or "business" can't do. Building business relationships is a characteristic of successful businesses. That teacher should be given the resources he/she needs to keep that customer. Instead, they ususally want your money until you stop spending it, then you are put on the street and told never to come back until you got the money.

    Cost is not always the factor, if it was, we would all be driving Kia's.
     
  12. SDsalsaguy

    SDsalsaguy Administrator Staff Member

    I love this! :applause:
     
  13. Sagitta

    Sagitta Well-Known Member

    Lots of good information in this thread. Thanks. Keep it coming. :D
     
  14. pygmalion

    pygmalion Well-Known Member

    Yup. Interesting thread. 8)
     
  15. etchuck

    etchuck New Member

    Change of venue happens. If your favorite doctor decided to start his/her own practice, you'd probably still go with the doctor. (Granted, I don't recall there being "no compete" clauses in medicine, or law.)

    It's a bit stranger when it comes to teachers. If this were a regular school teacher going from one school to another, there's no "no compete" clauses to deal with there (unless he/she is on severance or something). Even a coach going from one place to another. Now entertainment personalities may have to (like local DJ's), because the station's livelihood on advertising relies on the audience from the DJ. When a DJ leaves or is fired, the same angst that we discuss here will exist. Many of us will wait with anticipation for a clue where our favorite radio personality will appear down the dial (I know I did).

    So I guess for me the teacher, if the teacher is THAT good, is the most important relationship/asset. If the owner wants to retain that teacher, then... it's a business: do what you can to retain him. Otherwise, let him go as a free agent and tough it out.
     
  16. pygmalion

    pygmalion Well-Known Member

    btw, do studios make teachers sign non-competes? I know that almost all of them have non-fraternization clauses, which prohibit teachers from having contact with students for some period after the teacher leaves a studio -- two years, for one of the franchises. But do teachers sign an agreement that they won't work teaching dance at all?

    And yes. Believe it or not, there was an article about noncompetes in the local paper a few weeks ago. The enforceability of them varies by state. Hmm. Trying to remember which state renders them virtually meaningless. Is it Arizona? I'll have to check. (Hmmm. Lots of ballroom studios in Arizona. LOL)

    Having spent my whole career in high tech, I've signed a few NDAs (non disclosure agreements) and non-competes over the years. Bottom line is, they are enforceable in a lot of cases, but a lot of companies won't bother unless you have something unique. Lawsuits are expensive. If you're selling their intellectual property to a direct competitor, you most likely will end up in court. But if you're moving to another dance studio across town to struggle for business, I can't see that it would be worthwhile for a company to sue you. (Unless you're a doggone fine teacher. LOL) A lawsuit would cost more than the lost business, and could create ugly publicity.
     
  17. Another Elizabeth

    Another Elizabeth Active Member

    Actually, doctors and lawyers have to deal with this all the time, and the rule is pretty much what I described in my last post. If you're in a partnership, it's a violation of your fiduciary duty to your partners to solicit clients away from the partnership while you're still a member, and they can sue you for it even if the partnership agreement is silent on the issue. After you've left the partnership, it's permissible unless there's something in your agreement against it. But client lists are often trade secrets, so you can't take them away with you.

    Since dance teachers are generally not partners in the business, the noncompetition clause needs to be in their employment agreement.

    Pygmalion, California is the state that's notorious for not enforcing noncompetition agreements. As I said, it varies from state to state otherwise.
     
  18. Throwaway Overshare

    Throwaway Overshare New Member

    I just don't get it.

    If a studio can train a drop-in replacement for your instructor in 6 weeks, how come they can't teach you much about dancing in a few years of lessons?
     
  19. pygmalion

    pygmalion Well-Known Member

  20. dancin dude

    dancin dude New Member

    Been there done that from both sides of the desk. Started with one of the franchises as a 2 week wonder. Went to trainng class for two weeks, learned what to do and say on the first lesson and some of the second, started teaching and never looked back. In spite of this dubbious beginning, I am a somewhat accomplished and recognised pro-am competitive teacher. I owned a franchise for 10 years and had a situation arrise where my area franchisor HAD to let me out of my no compete agreement. Not due to anything REALLY on his part or mine, just some situations involving another franchisee that could have been handled differently, but even then what happened was completely unexpected.

    Anyway in regards to the no compete. The state I live in enforces them strictly. We had one situation where an instructor from the other studio here in my chain opened up his own studio, and I was involved due to assaciation via the franchise. From an owners point of view, a "Student/CLient" comes to a "Studio/Business" due to the advertising, promotion, efforts, and money of the "STUDIO/BUSINESS", therefore the "Student/Client" is a "Student/Client" of that "Studio/Business. An instructor is paid, an ammount they agree on BTW, to teach the "Student/Client" of that "Studio/Business". So what claim does the instructor have on the "Student/Client"? We had a situation when we went indy. 2 of our staff, having brainwashed into thinking that only "Franchises" are good studois, opened a franchise and immediately started calling their studnets. I could have fought it, but they, the instructors, weren't worth the effort, and how would it have made me look. I think it was tacky, because they were the loudest screamers when a couple left and before they moved from town called a few students for lessons. Well then "The students are the studios" and they got on their high horse real quick. Well they taught some of the people they were calling. The tune changed when they left, because those were their students and they "deserved" those students. Now, if they, the students, had called them and gone it is their choice, and I have no problem with someone giving me a fiar shot as a teacher and choosing someone else. But for them to solicit these students before my other staff members had a chance to provide good quality instruction and thereby win them over as a student... Well let;s put it this way. When I left to open my studio, I was very proud of the fact that none of my students stopped dancing for at least a year after I left. They loved dancing, not a dance teacher. 14 years later many of them are still dancing at that studio, and others are still dancing elsewhere, but since they got good quality instruction they were happy.

    The no compete is also in part to protect the "Student/Client" THere have been 2 instances where instructors left the other studio, and due to neglignece of the franchise in getting the no compete signed, they were allowed to open. They borrowed money from students and in both situations they closed inside of a year and the student lost thier money.


    So the long winded answer to your question is yes. An instructor can leave a studio under good consitions. And, depending on the situation and what they and the owner of the studio are made of they can leave bad if they so choose.

    As in many things in life, what is on the inside eventually makes its way to the surface.
     

Share This Page