Sesame Street English: 280 China franchises sold on a borrowed brand and 237% ROI charts

Sesame Street English entered China not from Sesame Workshop's New York home but through a detour: in 2014 Beijing Kairui Lianmeng Education Technology bought the 'Sesame Street English' teaching license from a Japanese company, and wrote its own textbooks. Marketing materials borrowed the prestige of the American show — '40+ years of research', '120 million children' — attributes of Sesame Workshop's non-profit TV mission, not of the tutoring product being sold.

Franchising was the engine. Reporters posing as investors were pitched a ¥3M investment yielding ¥18M within five years; another franchisee was shown a table with '237% annual return'. By 2016–17 it claimed some 280 centers in 58 cities, charging ¥20,880 per child. In 2016 Beijing's culture-market enforcement found 1,000 sets of K1/K2 textbooks and discs with no legal provenance and fined the publisher ¥2.2M; the industry and commerce bureau fined the company ¥100k for ads misusing academic endorsements, and commerce authorities repeatedly fined it for lacking the franchise qualification.

In August 2018 a Beijing center closed overnight, announced in a parents' WeChat group. Families who had taken 36% of their classes were charged half the package as 'materials fees', free gifts were monetized and clawed back, and one parent recovered ¥5,735.91 of a ¥20,880 course. Headquarters called the closure a relocation; more than ten franchisees were already suing, and some had petitioned the commerce ministry to revoke the operator's franchise registration.

The textbook publisher was fined ¥2.2M over 1,000 unlicensed sets; the operator paid a ¥100k Advertising Law fine and repeated franchise-qualification penalties.

The brand story was borrowed: the license came through a Japanese intermediary and the curriculum was self-written, while advertising traded on the US Sesame Workshop's reputation.

Franchise economics were sold with fabricated numbers — 237% annual returns, ¥18M in five years — that no tutoring school could deliver.

Compliance was treated as a toll rather than a stop sign: penalties for illegal textbooks, ad-law violations and missing franchise qualifications did not slow franchise recruiting.

Prepaid tuition meant every sudden closure hit hundreds of families at once, converting a business failure into consumer outrage.

A licence chain that starts at a TV brand and ends in self-written textbooks will not survive scrutiny. Selling franchises on invented returns does not scale a business — it manufactures lawsuits.

The 2017 national-radio reporting laid out the mechanics in public: a license bought from Japan, self-written textbooks, invented ROI charts, and regulators fining the chain along the way. By August 2018 centers were shutting overnight with disputed refund schedules, and the operator's official explanation — relocation — was contradicted by empty classrooms. More than ten franchisees were in litigation against the company, and the 'first brand of children's English franchising' had become shorthand for what can go wrong when a foreign brand is rented rather than earned.