So You Wanna Start a Hagwon?

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By Lee Scott

A little over a year ago, I started thinking about opening my own English academy in Seoul. As the spouse of a Korean citizen, it was relatively easy for me to get an F visa (F-2-1 visas are issued to spouses), and after a couple of years of marriage, it is possible to upgcartoonsmallrade that to the F-5 visa (permanent legal resident). Among other things, this visa allows me to permanently live in Korea (even if I get divorced,) vote in elections (haven’t yet) and own a business. There are a couple of different ways you can go about opening your own academy in Korea. I am only familiar with the route I took, but even that route was partially shrouded in a mysterious fog, so typical of this peninsula many of us call home.

“Byzantine” was the word my colleague used at my first job working for a Korean school. We were both sitting in the tiny office we shared, located on the 3rd floor of the relatively new (but ancient feeling) building in what used to be the foreign quarter of a large city in China. This man had worked for the school for about a year, essentially creating their English department from the ground up, while managing a Korean teacher who spoke fluent English, and a New Zealander who was married to a local and had been teaching illegally for a few years. It was my first experience with a culture that would at times amaze me and at other times baffle me. Two years later, right before I left that school, another colleague left me with a rather bleak view about education in Korea: “If I think about all the things I hate about the system, it makes me not want to be a teacher.” Many people — maybe you and I included — have to become quite tolerant of elephants in the rooms we inhabit.

After leaving China, I moved to Seoul in 2004. I worked in a small academy in east Seoul for a few months. One doesn’t talk about “dirty secrets,” at least not openly, but if you have worked in a language institute in Korea, you might have suspected that not everything was 100% above-board. I won’t disabuse you of your suspicions — more about that later.

So at the beginning of 2009, with a baby arriving soon, I began the mini-quest that is involved with opening your own English language institute (in Seoul, anyway). The players involved are your local “Gu” (district) office, the Korean tax service office, the Seoul Metropolitan Office of Education and your local branch of the Seoul police.

flash_imgIt is not easy to find the proper sequence of steps necessary for getting all the jots and tittles in the proper places on the myriad forms one gathers during this process. The fact that many of the steps are independent of one another and many of them are dependent on preceding steps adds a level of headache that only a practiced project manager, schooled in the critical path method (CPM) , armed with some kind of CPM software, could really map out. I do have that kind of training, but at that time, I didn’t have the inclination (nor did I anticipate ever writing anything like this) to document the process thoroughly. What you are reading will be a travelogue of sorts, a fond reminiscence of a meandering journey, sometimes harrowing, sometimes mildly amusing, mainly annoying, but ultimately gratifying. And that was just getting the license!

I really should begin at the beginning. Late in 2007, I began to have a severe case of “senioritis” while working at my job. I had been working for a prestigious foreign language high school in Seoul for three years, hired by one principal (a man I knew and respected) but never getting to work for him — turns out he jumped ship a month after pulling the trigger on hiring me. Working there had its plusses. I loved the students I taught at this school. They were a great pleasure to teach.  It was a relatively stable job and even though the starting wage (I say wage and not salary, because we were paid only for the hours we spent in class) was the same wage they had been paying since 1997, it wasn’t the worst in Korea.  It was pretty close to where I lived, so commuting wasn’t a chore, and I liked most of my colleagues.  But no matter how much all that weighed in favor of continuing to work there, the overall level of dissatisfaction I felt with the principal overwhelmed it.  To be fair, I realize that we had become stuck in a kind of negative feedback loop.  He started out by doing the normal things principals here do (i.e. distrust native speakers as teachers).  He has very good reason for this: many people who come here to teach are not qualified, oftentimes lack any kind of experience at all (recent college grads), and are also often merely adventurers wanting to experience Asia on someone else’s dime. This is a laundry list of stereotypes that all of the native speaking English teachers who work in Korea (and elsewhere in Asia) decry as being unfair.  I suppose that stereotypes are always unfair, but they come to be accepted for some reason.  In this case, they come to be accepted because it has happened just that way many times in the past.  Even this school, prestige notwithstanding, had had its share of foreign troublemakers.  Should the good teachers be punished because of the bad apples?  Of course not, but even principals are just human.  So even though I understand why we were micromanaged (little notes would appear on our desks, with new things we were to do or not to do), and consistently (albeit intermittently) surveilled during classes, it created stress.  The stress I felt was manifesting itself in physical symptoms, headaches and back pain that was inexplicable — inexplicable that is until they mysteriously disappeared a few weeks after I had quit.

After deciding to open my own place, I needed to find a location. I asked a friend of mine if he had any real estate broker friends. I was hoping to get some kind of good-ol’-boy deal, if something like that existed in Korea. I guess it would be “good-ol’-ajjoshi.” Location, location, location.  Is that the way you write it?  Maybe it should be a series of exclamations.  You pay a premium to be in the high profile areas.  The southern part of Seoul is extremely expensive, and home to many big-brand name language schools.  That’s the big time.  The second tier of language schools (almost as prestigious as the ones down south) are way up north.  That’s where our place was to be located.  My friend contacted me a couple of days later and told me he had found an academy space available for lease right away. My wife and I traveled to northern Seoul to take a look at it. For us, as neophytes, this place seemed to be too good to be true. The space was fully furnished as an English language academy and the price was affordable.  It’s true that it was off the main drag, but it was close to tons of apartment villages and several schools. We couldn’t believe our good luck. A note about furnished spaces: If you want to rent a space that has previously been used for the same business, and may have existing clients (students) and furnishings, you will pay an “authority fee.” This fee will vary, according to the number of students (if any, of course) and the nature and cost of the furnishings, the interior design, etc. It could range from $3000 up to $20,000 (or possibly more, but that would have to be for a really really big operation.) Now there is some wiggle room on this kind of authority fee, but basically it’s in bad taste to try to negotiate it down too much. If you feel you are being overcharged, of course you should haggle. It is in the leasor’s best inDSC01557terest to try to get the same kind of business in there, because if they can’t, they’ll have to pay to revert to the interior design of the previous state before they moved in. That kind of deconstruction remodeling can be expensive, depending on the size of the establishment, so that is the amount of room you have for your haggling. It’s up to you to decide if they are asking too much for the fixtures. For us, it seemed reasonable. We didn’t get any existing students.  Korean leases usually involve a large deposit ($20,000 to $100,000 is common) and then a monthly rental fee.  Our place was near the bottom of that range.  The monthly rental fee for our place is about $500.  All together, it cost us about $75,000 to get started.

After finding a location, it was then possible to get my own license, the business license, my tax identification number and have the academy rezoned. This last part was a major hassle. Since private language academies are invariably in commercial spaces, it is necessary to rezone them every time they reopen. Even though the previous tenant at my new location had been an English language institute, the very moment they closed their doors, the place reverted back to commercial zoning. That meant I needed to get an official to recertify that the location was qualified to be a language academy. If that strikes you as absurd, join the club.

The tax number was extremely easy to get and straight-forward. Once I had established my academy with the office of education, the tax office folk were perfectly willing to set me up. Naturally, the tax folk have their acts together.

I mentioned getting my academy established with the office of education. That part is quite tricky. It required me to travel back and forth between the local–Gu office and the office of education multiple times, since they couldn’t be bothered to reveal more than one step at a time to me (even on things that could be done independently). It is on this particular point that I wish I had made copious notes about the proceedings. I understand now why some law offices make big money by shepherding would-be education entrepreneurs through this process. I was lucky enough to have a genius sister-in-law who not only did all the initial research on the process, but basically tour-guided me through it, all the “extra” trips notwithstanding. I will say this about the education office people: if you are nice to them, they will be nice to you.

A noteworthy part of this process involves reporting your pricing structure hag5to the office of education. There are laws in place to protect consumers from price gouging by language academies. These laws are typically thrown out the window by most large academy chains, or they simply do not apply. It appears to be common practice to stay within the letter of the law, but somehow creatively make it possible to charge enough to be able to operate your business in addition to making a living for yourself. I will leave it to your imagination how that is done. Also noteworthy are the various levels of academy that are licensed. The giant chains are language academies, the top tier. These are the academies that are able to sponsor people for E visas in Korea. Below them are the smaller operations. Legally, I am not able to hire any other teacher in my academy. My space is only big enough for a one teacher show. Further, I can only have eight students per class period. These requirements are in place to protect the large academy chains from competition brought by smaller independent organizations.

The process of setting up the academy is rigorous, but certainly nothing that will dampen the spirits of even a person of normal-levels of optimhagwon2ism. It wasn’t until I had opened and started to face the grim reality of how to attract students that my real test had begun.

To be continued~

Lee Scott is from Oklahoma and has taught in China and Korea. He’s a film buff, a lover of good ol’ rock ‘n roll classics like Jim Croce’s “Bad Bad Leroy Brown,” and a cyclist of Seoul’s streets.

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29 Responses to “So You Wanna Start a Hagwon?”

  1. Scot Wildeisen Says:

    How often do you write your blogs? I enjoy them a lot 1 9 9

  2. Lee Scott Says:

    Thanks! This is my first piece for the 3WM. Hopefully will have part 2 up next week.

  3. Mizaru Says:

    We publish evey Monday up to five new features…
    Lee Scott check with J.R. for your publishing schedule

  4. Mizaru Says:

    Lee Scott.
    If you post this on Dave’s esl cafe ‘forums’
    You’ll gets lots of play on this.
    I believe the name of the forum is something about ‘general Korea’.

  5. Dallasstyle Says:

    Ths site is excellent. I am thinking of coming to Korea. I want a place to write and enjoy the company of interesting peeople. Looks like I’ll be coming to Seoul. You three wise monkeys are in Seoul right? Dally

  6. Ted in daegu Says:

    Excellent read! Lots of insight and a straightforward telling of the experience. This is so much better than listening to loserville on Dave’s Esl cafe.
    And no I don’t want to own a hagwon!

  7. Vin Says Says:

    Good Stuff. When is there going to be a part II?
    if I can find the time and get my sh@t together I am going to send you monkeys something. At least now there is a place to post for people who have something to say.

  8. KELLY P Says:

    Wow very thoughtful. It boggles the mind what people have to do to get something going here in Seoul. I mean since when is education all about money and posturing to make it? I think it best to come here live on noodles, put your head down do your time and get on to somewhere on planet HUMAN!!!

  9. Mizaru Says:

    Not to be self-inflating, but 3wm is all about keeping it “HUMAN” and real too.

  10. Sarahreadme Says:

    Hi Just discovered this site. Cool Bananas!!! Good story here about Hagwonism. I hope I never have to work at one of those again…

  11. Adeel Says:

    Why are there laws to protect large chains from small ones? Is that really necessary?

  12. Bobby M. Says:

    Wicked site! An inside look into owning a Hagwon. I have thought about it a few times. My Korean drinking budies are always talking to me about it. Never. Never. Never.
    The law does not matter over here. Unfortunately it is only who you know and who you bribe.

  13. Zaapphista Says:

    Long story. It was worth it though. How long has this site been up? I saw it on another internet site (that one mostly sucks unless you want a job). keep up the good work and owning a Hagwon is not something that anyone who has not grown up in the culture attempt.

  14. Juregen Says:

    TO:
    # Adeel
    Why are there laws to protect large chains from small ones? Is that really necessary?
    ——————————————————

    For MoE it is easier to control and influence a chain with 300 schools and teachers than dealing with 300 separate schools and individuals.

    Therefor they prefer to protect the chains rather then the small shrimp.

  15. Tweets that mention The Three Wise Monkeys » Blog Archive » So You Wanna Start a Hagwon? -- Topsy.com Says:

    [...] This post was mentioned on Twitter by Danielle Harms. Danielle Harms said: I like illustration in the article. See the big school on the right blocking out the little guy? That's where I work. http://bit.ly/csVn1U [...]

  16. JM Says:

    That is well-written. I’m running a 교습소 so the registration process was simple and I’ve been fortunate with the local education office so far. The cartoon at the top is spoton. The big hagwons are not pushovers at all. In fact, at least based on their promotional stuff, they look like they run like well-oiled machines. Particularly in comparison to my mom and pop shop.

  17. Ian Says:

    Great and informative piece. I’m doubly interested after noting that I’m 99% sure the picture you posted is of where my old hagwon was in Nowon, where I taught 2002-2004. Now I’m wondering if that’s the space you rented-out and whatever happened to them. LOL

  18. Lee Scott Says:

    @Ian,

    Thanks for your comment. That picture is indeed near where I have my hagwon, but I’m not located in that building. That was really supposed to just illustrate the general area as a “hagwon street.”

  19. Thomas Lee Says:

    Loved the piece, thanks! I’m considering getting a D8 (investor Visa) for Korea and am wondering if that is better or just to get an F2 Visa since my wife is a Korean national… I have an office in Yong-In and am considering, once I move to Korea permanently, opening a Hagwon. Thanks for the info.

    BTW: Is it Lee Scott or Scott Lee? My last name is Lee, but I’m a 6’2″ Texan and my dad was an Okie. If you’re a Scott Lee, we might be related! :-)

  20. mizaru Says:

    Part 2 of this story, So You Wanna Start a Hagwon, is up on top of this page. ed.

  21. The Three Wise Monkeys » Blog Archive » So You Wanna Start a Hagwon: Part II Says:

    [...] In part one; I talked about some of the preliminary steps involved in getting your own (small) hagwon, or language academy, started. This week, I’ll recount the first few months of business. [...]

  22. Jamila Altmire Says:

    Thank you for your help!

  23. Mike Says:

    I’ve lived in Korea continuously for 13 years, but on single year E2 visas I’ve had to renew annually. I’ve asked at Immigration for a permanent residency visa several times, but they are adamant in telling me you cannot have a permanent residency visa in Korea unless you’re married to a Korean. How fair is that after 13 years working here? So once again, the two classes of foreigners remain separate and very unequal, and thank you for underscoring how privileged your class is here.

  24. Lee Scott Says:

    Mike, the Korean gov’t recently made provisions for foreign nationals to receive an F visa without marrying a Korean. You should be able to find details from an Immigration Office.

  25. Jin Says:

    What is the difference between a hankwon and 교습소 in getting a liscence?

  26. Lee Scott Says:

    Physical size difference. There are essentially 3 levels (1 man, Korean-teacher employees only, and E-2 sponsoring size.)

  27. Meredith Priesmeyer Says:

    So, how did you go about doing the scary part–attracting students?

  28. Meredith Priesmeyer Says:

    Additionally, your mom and pop shop sounds a lot more like a Kyosubso than a Hagwon. I’m guessing that’s why you have so many restrictions and are unable to hire teachers.

    So, you’re title should read how to do that, right? Seems to me that opening a Kyosubso is much easier and cheaper to boot.

    In any case, promotion is an interesting topic. What do you do?

    My friend has a Kyosubso and he advertises by getting ajumas to drop of flyers in apartments and puts a little ad in the paper.

  29. Lee Scott Says:

    Meredith, where were you when I was struggling to title this piece?

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