Let's Japan.org Debunking Eikaiwa and Ramblings in Japan

According to the Asahi Shimbun, NOVA has been ordered by the Ministry of Trade, Economy and Industry to partially suspend operations for six months during which NOVA will not be able solicit, accept, or conclude any new contracts exceeding one year. METI found NOVA's behavior to be in violation of the Specific Commercial Transaction Law.

This article appeared in the early afternoon before METI's official announcement. The Nikkei has a few more details: NOVA will not be allowed to solicit, accept, or conclude any new contracts exceeding one year for six months starting from June 14 until December 13. This means no contracts for courses more than a year and courses longer than 70 hours. METI also ordered NOVA to improve it children's courses and courses less than 70 hours over the next 6 months. What this improvement entails is still vague. Better training? Maybe better textbooks?

This is the first time for a language school to be punished under the Specific Commercial Transaction Law. NOVA's students will still be able to take classes as usual and existing contracts are unaffected. Since NOVA's business model relies on long-term contracts, METI's punishment will hurt NOVA's cash flow. NOVA will have to start selling a lot of short-term lesson packages to make up for the losses, and that doesn't seem likely.

NOVA's share price, which had been hovering around 100 yen tanked to 83 yen at one point in the afternoon following METI's decision.

The end of NOVA has been forecast for a long time, but this decision is the first real punishment for NOVA's business practices. My guess is that some school closures and layoffs are inevitable as NOVA tries to cut and control costs. I also wouldn't be surprised to see a "one-year" campaign of sorts to drum up business and smooth over the hurt put on them by METI. But is this enough? Or is the question now a matter of when does NOVA go under?

It's hard to recommend working for NOVA or staying with them at this point. Despite the lousy work environment and teaching materials, they still paid you on time and put a roof over your head. Now with slumping sales, two straight years of red ink, thousands of student complaints, and unflattering press coverage of late, NOVA is a radioactive company. Now would be a good time to get out and move on. Trans-Pacific Radio takes it one step further:

If you work for them: Quit now. Do not go to work tomorrow. Never show up again. Get a new job now, before the deluge of former NOVA employees hit the streets. You do not owe them anything. If you’re a foreigner on a visa, that does not mean you have to work for NOVA. When a company is so awful, so horribly managed that the government of Japan needs to suspend part of its operations, I seriously don’t think you want anything to do with them.

If you’ve been thinking of starting your own business and/or small school: Get your business plan ready this weekend. Get it ready to go. This is about to be a huge opportunity. Start talking and getting the word out. Buzz market. Build relationships, work yourself into position to get loans. Most of all, build trust into your brand image. Yes, have a brand image (not a rabbit).

The whole post is worth a read, too. I agree that it's time to quit NOVA, but the smart move would be to have something lined up first before jumping ship.

UPDATE 1: So I settle down to dinner in front of the TV and what should appear as the lead story on the most watched news program in Japan, the NHK 7 o'clock news, but NOVA. For a solid five minutes, NHK recapped NOVA's problems and finished with a little twist of the knife by asking whether NOVA would be able to win back the public trust. You can't get any worse publicity than that. Suddenly, Trans-Pacific Radio's advice to just up and leave doesn't sound so drastic any longer.

UPDATE 2: Via the NOVA Teachers United mailing list, a video of the story finally makes it to YouTube.