How do I review a language school’s reliance on international student referrals?
Ask for enrolment by source: agents, partner schools, online enquiries and walk-ins. Read each referral agreement for commission terms, exclusivity and what happens on a change of ownership. If a few agents send most students, the school’s intake depends on relationships you will need to rebuild or keep.
Start with a source table. For each term, ask how many students came from each agent or partner and how many were direct. Then look at concentration: does one partner supply a large share, and is that partner tied to the owner personally? A smooth top-line number can hide a single point of failure, so ask who at the school owns each partner relationship day to day and how it is documented.
Next, read the agreements. Check how commissions are calculated and paid, whether they are owed on repeat enrolments, whether exclusivity is promised either way, and whether the contract allows termination when ownership changes. Look at unpaid commissions or disputes, and ask whether any partner has stopped sending students and why.
Finally, think about how fragile the demand is. International intake can be affected by policy shifts, travel conditions and exchange rates, so ask the seller how the school responded the last time numbers fell. Find out what the school does to attract students directly, such as its website, reviews and alumni referrals. Ask your lawyer about the agreements, and your accountant about how commissions appear in the statements, before you treat the pipeline as dependable.
Key takeaways
- Break enrolments down by source and see how much comes from a few agents.
- Read each agreement for commission, exclusivity and change-of-ownership wording.
- Ask what the school does to attract students directly if a partner leaves.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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