- Families appeal to city authorities and toy company for help to recover fees already paid for classes
- Four outlets shut their doors in aftermath of contract dispute
Hundreds of Shanghai parents are appealing to Danish toy company Lego for help after four of its authorised learning centres suddenly closed their doors, leaving families tens of thousands of yuan out of pocket.
Shanghai Jixiao Information Science and Technology, which ran three Lego Education Learning Centres in the city, said in an online statement on Monday that it was left with no choice but to close the centres after Lego Education in China ended its agreement with its Chinese partner, Beijing-based Semia.
The closure of the centres " the Ruihong, Jinqiao and Haiwaitan branches " came just weeks after the Lego centre in Nanxiang shut down.
Semia was authorised by Lego Education to operate learning branches across mainland China and authorisation third parties to do as well, according to Shanghai-based Jfdaily.com.
Rachel Wang, a mother of a six-year-old boy, said that in various online forums about 650 families had reported losing a combined 5.2 million yuan (US$742,000) in prepaid classes at the three stores. Another 130 families whose children were enrolled at the Nanxiang store were seeking 900,000 yuan in refunds, she said.
Wang said the parents had appealed to the Shanghai municipal government to pressure Lego to look at the case.
"We are planning to sue the learning centre, and in the meantime we hope Lego Group can pay attention to this case and help us. Many of the parents chose these centres as we saw on Lego's website they were listed as among the company's authorised stores," she said.
"We are angry and very disappointed with Lego.
"It made a lot of money in China because we trusted it."
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Tao Lina said everything appeared fine when he took his five-year-old daughter to the Haiwaitan centre on Sunday.
"But the next day, we were told that the store had closed. I was so surprised," Tao said.
"We had never heard of Semia and we were not aware of its existence. We all thought that the learning centres was franchised directly by Lego."
He said he had paid for 144 classes at the centre and his daughter had attended about 60 of them, each costing 160 yuan. Tao said he hoped his daughter could continue attending the classes " which use Lego products to teach children about subjects such as robotics " but had not been able to contact the centre's managers.
Shanghai Jixiao said the termination of the Semia-Lego Education agreement had scared off parents, cutting cash flow and forcing it to close the centres.
In its online statement, the company said its troubles started in September, when it received a lawyer's letter from both Semia and Lego Education.
"It required us to promise not to use the (Lego Education) logo after December 31, 2019 and to stop teaching Lego courses after August of next year," Shanghai Jixiao said.
On October 11, Lego Education said on WeChat that it had terminated its cooperation with Semia. Most of the 137 Lego learning centres in China would be allowed to use the Lego brand until December 31 and continue teaching Lego courses until July 31 next year.
But after the announcement, many parents sought refunds, causing a cash-flow crisis for the Shanghai company.
Shanghai Jixiao also said that the lawyer's letter sent in September required all learning centres to sign an agreement absolving Semia of all responsibility.
If it signed the agreement, it would have three months to change the brand and products, which Shanghai Jixiao said was impossible. If it did not sign it, it would have to stop using the Lego brand at once.
Shutting the centres down was the only option after their various efforts, including joint appeals with other mainland learning stores to Lego, visiting Lego headquarters in Denmark and calling Lego's executives, were unsuccessful, the Shanghai company said.
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It offered two mobile phone numbers for parents to contact them but the phones were powered off on Wednesday and Thursday.
Lego did not respond to a request for comment from the South China Morning Post.
But on Wednesday, Lego said it ended the contract with Semia to improve the company's learning centres, adding that it had no business relations with the closed stores, Thepaper.cn reported.
A manager at Semia's franchising department identified only as Wei was quoted by Jfdaily.com as saying that the authorisation contract for the three stores owned by Shanghai Jixiao actually ended between October 2018 and February this year.
"They were waiting for us to renew the authorisation contract with Lego, but we failed to reach an agreement with Lego. So these learning centres lost their authorisation," she was quoted as saying.
Wei said all the authorised stores operated independently.
"Legally speaking, their problems should be solved by themselves," she said, adding that she could not contact Shanghai Jixiao's owner either.
There are 19 Lego Education branches across Shanghai, according to Lego Education's WeChat account.
Market regulation authorities in Pudong and Huangpu districts had started to look at the case, Jfdaily.com reported.
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