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5. Business Model/Plan

5.2. Key Performance Indicators

5.2.3. Key Partners

 2 Foreign Low-Cost Labor (Housekeeper, Cook, Assistant Caregiver)

 1 Part-Time Driver and Yard Assistant

5.2.3. Key Partners

With our intentions of growing in both scale and scope and crossing boarders, Abraham Academic Academy is aware that they will be unable to do it alone. Our key partners are an intrinsic part of our business plan and we will work closely with them to ensure that our customers and franchisees are getting the proper support they require to become successful in today's economy. We believe that a prominent feature of Abraham Academic Academy is our network of connections. This powerful network would be appealing to a prospect franchisee owner, because when someone buys a franchise they are not only getting a package of support, but an assurance that they are not and will not go it alone.

As a matter of policy, Abraham Academic Academy will not make direct sales of merchandise or materials to franchisees; instead we will utilize our network and organize the supply of merchandise and materials to schools through approved third party logistics operators. Abraham Academic Academy believes that honest and reliable partners play a vital role in our success. It will be through the ongoing sales and communications amongst our network of members that we will be able to ensure the honesty and reliability of our key partners. Abraham Academic Academy believes it is the access to our resources, like our key partners, that gives our franchise members an advantage over those without. Some of these people that we will be working closely with are:

5.2.3.1. Overseas Low-Cost Caregivers

Head-office will work with overseas human resource agencies that supply overseas low-cost labor in order to procure the best possible labor at the cheapest prices. As a method of keeping costs down we will supplement labor wherever possible to give us an advantage over our competition.

Because, on average, low-cost foreign labor has a lower turnover rate in the industry and will stay with a company for an extended period of time, we will provide training for our low-cost labor and certification where possible in order to bring them in line with specific duties. We believe this is important and represents an often over looked avenue of opportunity in many other business models. Another factor besides the lower than usual turnover rate is the reciprocate gratitude received from the low-cost labor workers when their quality of life is improved that is unmatched by their local counterparts; training them and treating them better just makes sense. It is surprising, but this is something not often done by many language and cram schools in many countries, like the majority of our competitors in Taiwan.

These individuals will initially provide the majority of the basic labor required like cooking, cleaning, maintenance and fixing. Additional training will be based on an individual’s potential for other duties as required like driving, child care, office work, and teacher aid.

5.2.3.2. Local Assistant Caregivers

Head-office will try to work with some educational institutions and departments in hopes to procure student labor. Every year students attend normal or vocational universities and schools in fields related to our business and seek ways to gain work experience. Practical work experience is a major concern for many students and by working for us we can provide an individual with a reference for their resume, an experience in a work related field, or a starting point for their career. For others we may be able to persuade them to remain with us to hone skills or build a career.

We will put job postings up and make it a point to have semesterly and yearly internships available whenever possible. Internships allow companies to sample labor by seeing first-hand how candidates perform without being fully committed to that individual. This gives companies an eye into the future for possible job prospects.

Another motivational factor is dependent on a nation's student labor laws as student labor in many countries represents an avenue to cut costs. Many students are paid a fraction of the

wage and without the benefits that an employee would have to be paid while performing the same duties.

5.2.3.3. Overseas Native English Speaking Teachers (NEST)

One of the hardest aspects of maintaining an international language school is the procurement of both the number and quality of foreign teachers to fill the positions required. This is followed by the high turnover rate as many foreigners view their position at best as temporary.

Abraham Academic Academy has a four point plan to aid with these three aspects of long-term foreign teacher procurement:

 First, is to use a specific key employee’s, John Vatougios, knowledge of and

connections with his hometown universities in Vancouver, British Columbia Canada.

It is the plan to recruit university students interested in taking a break from their studies and wanting to travel abroad. He will also engage the education departments of the universities in a bid to attract teachers through the offer of gaining experience.

Lastly, will be the focus on students who apply to the teacher education programs.

There are only 8 teacher education programs in the province that lead to a teacher’s certification and allow an individual to teach in the K-12 public school system. Access to these programs is difficult and only 1 in 4 candidates are admitted into the program.

An overseas job placement at Abraham Academic Academy would be right up their alley, we would allow teachers to come and work while applying to the program until they are accepted. Our offer would be to provide both training and insight into the field of overseas education allowing them to beef up their application proposals.

 Second, will be to attract native speaking English teachers through our overseas partner language schools. These schools would act as recruiting agents for us for a fee. This fee will be paid half by the school that receives the teacher and half by the

employee who get the job. This fee will come out the teacher's first few salary payments and Abraham will make the payment on the schools behalf to the

recruiting agent/school once that teacher has fulfilled half of his negotiated contract (Contracts are usually negotiated on a year by year basis).

 Third, will be the establishment of Abraham Academic Academy overseas language schools. An overseas language schools will be beneficial to us in three

ways: Locations that local students want to go to learn English are places that language schools thrive, Abrahamic affiliated schools in these locations add prestige and can provide the franchise with alternative forms of revenue and different business opportunities; the strength of a Language school’s overseas connections is known to be tied to that school’s viability and success; and we can increase our network and advantages like supplying students to our own schools, while enticing teachers to come abroad to work with us.

 Fourth will be implementation of the ambassador program. Many foreigners have mixed or bad experiences teaching abroad due to culture shock and the acculturation process. The experience can be difficult and is known to deter future prospects.

Schools are also known not to do enough for their teachers nor support them in their process, which cause many to fall off track. Part of the ambassador program will be to right these wrongs and to offer foreign teachers long-term prospects through the ability to become an entrepreneur; opening their own franchise. We know that many may not stay, nor want to pursue such an avenue at the time of employment. However, through such programs we believe that we would decrease our foreign teacher turnover rate while improving the quality of work during their period of employment.

Above all it is the intention of the program is to spread the word and bring potential employees back our way when they or their friends are ready.

I, John Vatougios, being a foreigner have gone through the process, which allows for a higher understanding of the problems, situations and remedies. I have seen the good, bad and ugly of the systems used to keep us in line and I know which systems are good and which ones can be made better. Through improving cross cultural relations between foreign and local teachers and the administration that oversees them, I believe that schools can make foreign teachers their ambassadors; rather than mistreating foreign teachers, not spending the time to align them with a school’s systems, or make them feel at home. Many schools unintentionally make

sure that their foreign employment is temporary through inappropriate conduct, so when time comes to part ways foreign teachers leave on bad terms. The fact that the terms are not good imbues the notion that future foreigner teachers will be deterred from going abroad or going to specific schools. All and all, my experience and understanding of the situation is an asset going forward.

5.2.3.4. Training and Quality Control

An important aspect of developing a recognized and reputable international franchise chain would be the assurance and guarantee of quality that we provide our customers and end users.

Part of this for any franchise chain is the training of new employees within an existing chain and the training of franchise branch owners. Abraham Academic Academy will provide training to its employees and franchisee owners at specifically designated company owned schools or at franchise operators who are licensed to teach around the world.

Through the completion of a set of developed courses we will offer our franchise owners certificates. Courses will be arranged by title/position, topic, and level. Tutorial information and self-diagnostic tests will be kept on-line for individuals to read up on and practice, but to be certified an individual must proceed to a designated school and undergo testing under formal conditions.

Schools do not need to pass all levels and acquire all certificates, but it is encouraged through a reduction in franchising fees, reduced franchise supervision, leniency over punishment and less corporate intervention with regards to specific matters. There is a minimum level that must be acquired for a franchisee to stay in business and a schedule of completion over a time period that must be kept unless extenuating circumstances are provided. Head-office has the power to make a franchise owner's school take classes if a situation or set of circumstances arises that point out a weakness or misalignment between their school and the Abrahamic way of doing things. Generally this would only be done if the course was deemed necessary and part of an action required bringing about a resolution to a specific problem.

For franchise operators who want to become licensed to teach courses and be responsible for training and quality control in a region that has no center, there will be another set of courses that can be taken that will provide that license and certification. There are several motivational reasons for becoming a licensed center. One will be the prestige and status associated with their school in the public's eye. Customers and end user will have access to a schools level of certification, which might affect a parent’s decision in choosing an appropriate school. The top two tier schools will receive special recognition and schools licensed to teach and supervise other schools will place amongst the top tier. Part of the franchising fees collected is for the purpose of training and maintaining quality control.

Licensed schools will receive a share of this revenue based on the other schools usage of the training and certification programs in their region. To encourage training and certification Abraham Academic Academy issues a number of training credits to a franchise owner based on their fees paid. These credits will differ according to contract with a portion of credits issued being fully redeemable (head-office pays for the training) and the rest partially redeemable (a percentage paid for by head-office and the remaining percentage paid by the school receiving the training). Franchise operators licensed to teach will be able to redeem the credits for cash.

5.2.3.5. Durable Equipment and Materials Procurement

A large capital investment in durable equipment has to be made for a school to get off the ground. Additional investments will be made by schools for maintenance purposes, for growth purposes, or in order to keep up with Abrahamic standards. This equipment has to be strong enough to put up with a child's vigor, safe enough to avoid injury, built well enough to avoid liability, and cosmetically pleasing enough to a parent's or child’s eyes, while aligning with our corporate views of what an Abraham Academic Academy school looks like.

We understand the difficulty and costs associated with starting a new school or converting an old school over into a school that conforms to our beliefs. We believe that it is not necessary for a school to invest in only new equipment and therefore allow franchise owners to buy second hand equipment.

Abraham Academic Academy head-office keeps a catalogue of relevant information available online for franchise owner’s viewing. We believe that it is important for owners to be in the know, especially when it comes to the current fair market price for furniture, equipment and material purchases and for school maintenance and renovation labor costs. We allow schools to communicate with one another and to post deals and information that they believe is relevant and helpful to other franchise owners. The information that head-office provides is categorized and classified in sets of lists: pricing lists that indicate ranges of typically wanted goods and services and their range of acceptable prices, preferential low cost providers of goods or services, or a classifieds section for goods for sale and services for hire. The lists will contain all the information that a school owner would like and need to know when making infrastructure investments like the poster’s information, an item’s description, the item’s cost and the vendor’s contact information. An example of some lists would be:

 A list of new equipment providers

 A list of second hand equipment providers

 A list of labor specialist (custom built) (construction, cabinetry, electric, plumbing, concrete, metal, landscaping)

 A list of people who service and repair equipment

 A list of material providers

An example of some lists arranged by category is:

 Playground Equipment

 Sport and Goods (Athletic Equipment)

 Appliances (Kitchen, Air-Conditioner, Laundry)(commercial, commercial lite, and household variety)

 Electronic and Computer Goods

 Transportation (School Bus)

 Cabinet and Furniture (Tables, desks, chairs, shelves)

 Raw Materials (artificial grass, gravel, sand, cement, asphalt, rebar, steel, wood)

 Security Equipment

Durable equipment and materials procurement). The purpose is to provide awareness and give options to franchise owners who would like to save time and money. Franchise owners can do their own sourcing or use a trusted reference from the list when in doubt.

An example of some lists arranged by category is:

 Curriculum Text and Note Books

 Whiteboards and Stationary

 School Memorabilia and Collectibles (uniforms, school bags, water bottles, lunch boxes, handkerchiefs, hats)

 Printing Services (cards, envelopes, flyers, letter head, certificates, signs, posters, decorative items, banners, pins, badges, trophies, stamps)

 Musical Instruments

 Toys

 Insignia, Logo and Crest Services

 Interior Decor and Design

Note: some items must conform to Abraham Academic Academy standards. A detailed explanation of this conformity issue is discussed in section 4.7.

5.2.3.7. Consultation and Student Services (Focus on Overseas Programs)

Educational services are known to be of outmost importance to the success of a language school. Parents are always concerned about what comes next for their children and if the services that will be rendered will be aligned to the next stage of their child’s development.

Educational services help in building a strong bond between a school and its customer. A school that is informed can ease parental concern with options and answers to questions. A school with solid explanations can build a trust that turns into reliance in unsure areas. If a customer trusts you they will trust your recommendations. This is why Abraham Academic Academy intends to be informed of local and international programs and services of interest

and will try to establish a partnership with them for the purposes of increasing the company’s revenues.

Abraham Academic Academy understands that customers will leave our schools and try other schools and programs in other places for a variety of reasons. So, while Abraham Academic Academy will focus on the promotion of our own services, our own K-12 curriculum and instilling faith in our own Chinese and English programs, we will provide extra information to ease parental concerns regarding their child’s options and mobility in, around or out of Taiwan. We will have long term plans mapped out for our customers and will inform them of what they can expect and where they can go in the long run through the use of our schools and partners. This way, if a student needs to transfer to another school, we will aid our customers in their decision and not leave them out in the dark. It is not only our job to prep a child for an overseas education, but to facilitate the transition. If a parent needs we will have all the information available and ready on hand to help a child make the transition smoothly.

Obliviously this service has many benefits if partners are established. For example if a transfer is required within Taiwan then we will refer our students to other Abraham Academic Academy schools if possible, otherwise gracefully refer them to another key language school partner or affiliate. If aid is required for services outside of Taiwan, it would be best for us if we cooperated with a few reliable boarding centers, had knowledge regarding some popular public and private schools and developed a key language school network of partners and affiliates in a few of these popular destinations. The development of this network would be valuable to our customers and key to our success.

This notion of having key partners parallels the important reason why Abraham Academic Academy wants to grow into a program that covers kindergarten to pre university courses.

Why should Abraham Academic Academy build up a business’s clientele just to pass it onto someone else, or because of the limited age group confined to a specific school not develop services deemed important to our customers just because we are not getting a piece of action.

In our business model everyone will win, with each partner’s hand in another’s. Each member of the network will be paid for the good work they did. For example, the tuition gained by one

school for the enrollment of their students will result in a commission to the other school that did all the groundwork.

Note: Educational services are also known to provide a viable secondary source of revenue.

Note: Consultation and Student Services are talked about in more detail in section 5.5.3 under Expansion Model Plans.

5.2.3.8. Web and Cloud Service Providers

These services will be completely outsourced. Our website design, layout and development

These services will be completely outsourced. Our website design, layout and development