- May 27, 2008
- Reaction score
- Olney, Maryland
The OP has another thread that, aside from the specifics of dan/gup gradings, is essentially the same; bemoaning testing fees in the MD/DC/NoVA area. The following is my response on that thread:
I'm going to preface this by saying that I find the proliferation of testing fees and additional fees to be distasteful and by adding that I do not charge for testing.
One of the reasons for the increase in testing fees is unrelated to greed or a lack of integrity. I live and train in the area you are posting about and I spent many years in retail, both on the sales floor and in management. Landlords in this area are rent crazy. They would rather have empty space than charge a more reasonable rent. Buildings here literally sit empty for years because of this. When I was training with my last Korean master, I saw firsthand how the mall management squeezed more and more money from him. A good friend ran a bookstore next to the dojang, which is partly how I found the dojang. He couldn't afford it, didn't want to close or move, so he accepted a buyout offer from a larger bookstore.
GM Kim eventually got fed up and moved to warehouse space which had no foot traffic but which he could afford without going broke. My bookstore friend? The comic book store that bought his store told the mall to go screw themselves, closed the store and moved all of the inventory elsewhere.
If you raise the tuition, people leave. If you increase testings and add fees, they are more likely to stay, especially if you create some value, be it a grafted on weapons program or a special patch or whatever else. When retail space in this area is around twenty dollars a square foot (some are lower, some are much higher).
That's eighty grand a month for a 4000 square foot studio. Many studios are smaller, but forty grand a month in rent for a 20,000 square foot studio (GM Kim's was slightly bigger is kind of puts things into perspective. Just to make rent, in a small studio in a mall with a tuition rate of 100/month would require 400 students. I don't know of any studio that has that many in my immediate area. So monthly testings, black belt clubs, and five hundred dollar first dan gradings make up the difference. Many commercial schools have some kind of pro shop and they make some money there too. If the studio is in a major mall, the rent is much, much higher than average.
Now, I haven't even gotten into payroll, but testing fees and pro shop are unlikely to make up the difference if you have fewer than 200 students. So here comes daycare, afterschool programs, and the like. All of this is just to keep the lights on and to allow the owner to make a living. Most studio owners in this area are not leading rich & famous lifestyles and many have families to support. Additionally, as business owners, they are responsible for their own health insurance. Most of these studios are two bad months away from closing their doors.
Me? I have a day job with great benefits and rent space at a ballet studio and a fencing salle. So I can afford to have sub-seventy dollar fees and no testing fees.
The argument could be profered that that is how martial arts should be, but the reality is that most studio owners become studio owners for the same reason that people study for and enter into other professions: because they want to work doing what they love. Why do we encourage this in other fields and discourage this in the martial arts?
Anyway, you seem to be on a soapbox about the area. That is fine, but you should at least acknowledge the economics of the area as well.
This is a follow up post that I had made in the other thread. Information correction:
I did some digging and looked up monthly rent and you are correct, making the average rent for a twenty thousand square foot studio about 3,300 dollars. I'm surprised I didn't catch that myself. Thanks!
When I left the Gaithersburg school where I had trained, they had about eighty students in total at the time. But when they were healthier, they had about a hundred, which would mean $10,000 a month.Take away 3300 in rent and you're left with 6,300 per month. Take out costs of insurance, payroll, utilities and taxes and you are probably down to around five thousand per month left over for the owner. That is roughly 60k a year gross income for the owner, which in Montgomery County, MD, isn't an outrageous salary. Now, from that 60K, he/she needs to provide themselves with health insurance, retirement, and all of the things that I get as benefits from my day job. I don't know what that works out to specifically, but if you have a family, it is not a lavish income in this area at all.