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does Queen Guinevere plan to wear tonight to the party? The good instructor cultivates the partnership idea with his student. WE decide to go on trips to Puerto Rico \(you can handle the business of getting the student to pay her instructor’s trophies. WE decide to sign up for courses, and when WE sign contracts \(based on the number of hours the instructor deems it is neither necessary nor desirable to discuss whether the instructor’s commission is based on the number of hours that WE buy. IT’S ALL IN THE FAMILY You want your students to give their all; it’s necessary to cultivate the proper blend of competition and teamwork. When you travel to Shreveport or San Antonio for a contest, have your students join in cheers for their studio. Cultivate a sense of family by asking students how Our Studio can be improved. They can be made to feel responsible for helping the studio do well so that everyone can have more fun. Have them bring guests so that you can acquaint them with the studio. For an even greater aura of belonging, have some of your more promising students buy non-voting stock in your corporation. You can give them special greetings, “Hello, partner.” A student who has invested will be especially diligent in recruiting new lesson prospects. And selling stock to this type of person is much more pleasant than offering your corporation’s stock to investors or professionals in your field who might demand financial statements and the like. In the warm family atmosphere you create, such issues probably won’t be raised. But don’t be greedy. Follow the lead of the Fort Worth franchisee who, when presented with a woman’s entire portfolio, did not take everything for reinvestment into his corporation. He selected some \(U.S. Steel, Mohawk, Malone Railroad of Birmingham, Alabama and These techniques and variations of them are not, by any means, guaranteed, nor can it be claimed that they are unanimously popular among dance franchises. Some 6 The Texas Observer studios may well prefer to do business with totally different methods and goals. But we can be confident that the above practices have been well-tested and developed over the years, and that they are available for further use and refinement to those who qualify, of course. Focusing on the advantages of a franchise dance studio operation should not blind us to problems that may arise. One of the easily surmountable but frequent difficulties is opposition from a student’s family and advisers. Many bank officials, lawyers, family members and friends might tend to discourage large investments in dancing instruction and non-voting stock at your Mr. Famous Dance Studio. But, chances are, among the people who are telling your student that she ought not sign contracts for 1200 hours of dancing, nobody will offer any attractive suggestions on how the student should spend the 1,200 hours. Marshall Riggan put it this way, “When families criticize studios, it’s easy for the student to suspect ulterior motives, to say, ‘All you children care about is my money.’ The dance studios feed on the loosening of family ties. My brother and I did the proper family togetherness things right after my father died, but then our lives moved on. My mother was being told by the world that she was through moving. We didn’t tell her anything to the contrary, but the studio did. The competition, the sense of belonging to a group, plus the one-to-one relationship with a dominant male instructor can exert a very powerful hold on someone who finds no other fulfillment for personal needs.” So much for the family and their friendly advisers. A more annoying problem area that could cause real inconvenience is oppressive legislation: Stocks: Let’s say your corporation, Bilkmore Ballroom Enterprises, doing business as Mr. Famous Dance Studio, wants to sell some stock, but you don’t want to register under the state securities act. Your transactions are exempted from the law’s requirements only so long as you use a registered dealer, you do not make repeated and successive transactions, you make no public solicitation or advertising, and you make no more than 35 such sales. But Section 5.I-A of the law, the part about public solicitations or advertisements is interpreted by the State Securities Board to mean that you must sell to “sophisticated, well-informed investors,” or to “well-informed investors who have a relationship with the issuer or its principals, executive officers or directors evincing trust between the parties \(namely close business association, close friendship, Violation of the State Securities Act is being charged in a civil suit, \(Mrs. Gus Wiethorn et vir vs R&J Inc. doing busines Attorney Robert Duke said, “My client says she knew nothing about stocks when she was persuaded to buy non-voting shares in R&J. Her only holdings were a U.S. treasury bill. The only reason that she cashed in this treasury bill to purchase R&J stock was because the defendents told her she would make more money by investing in their concern.” Stock sales totalling $104,000 to Elisabeth Riggan, a 66-year-old widow, resulted in a default judgment of $243,000 in U.S. District Court last year against Fort Worth dance entrepreneur Raymond Sonnier, his wife Johnnie, and their corporation, Fred Astaire Studio Enterprises, Inc. Clearly the state securities act is a considerable nuisance if Bilkmore wants to sell stock to its students within the law. The FTC: What does the ambitious dancing master need to know about the Federal Trade Commission? The Commission has intruded into the dance franchise business on three occasions so far: In 1960, the FTC issued a cease and desist order against Arthur Murray, Kathryn Murray, and David A. Teichman individually and as officers of Arthur Murray, Inc., for a variety of deceptive and coercive practices. Many of these practices were apparently admired by the competition because they are echoed in a 1964 FTC order against Fred Astaire Dance Studios Corporation and one of its licensees, Fred Astaire Dance Studio in Washington, D.C. Also cited in that action were Patrick W. , Arabia, Eugene T. Valentine, Lea W. Peclet, officials of the Washington licensee, and its manager George J. Strombos. Last February the FTC reviewed some of the same steps with four former Arthur Murray franchised corporations and their officers: Arthur Murray Studios of Washington, Baltimore, Bethesda and Silver Spring and individually named Victor F. Horst and Edward Marandola, also known as Edward . Mara. That ruling is now on appeal before the U.S. 5th Circuit Court. The FTC dockets reveal more persistence than originality in the respondents’ tactics. Among the practices described and enjoined in all three proceedings are bogus contests used as People’s. 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