Homeguard,
I don't mean to offend, but I probably will with these comments, so apologies in advance.
I do not know your club or the ethos behind it, but if you have to rely on unpaid "help" to keep your heads above water, then the long term future isn't exactly rosy.
I would not work with other FI's who cannot get paid. I would also not employ an FI who cannot be paid, as it would rightly cause havoc with the other FI's who would see it as having wages taken from them. I would be annoyed by it myself.
I take great pride in doing things correctly (as I see them), and paying people a decent wage for what can be a very demanding job is one of my goals. I am an Instructor first and foremost. Ripping people off by not paying them is something I find deeply offensive. If a company cannot afford basics like this, then how can you invest in the future?
Our instructors don't actually cost the company anything since they are paid by the hour which is directly paid by the customer. We are always looking to improve this renumeration and it has to be sustainable, but the goal is eventually to have our instructors earning a decent wage (not compared to McDonalds) rather than on an hourly basis.
The only real option is to let all FI rating holders get paid, regardless of licence type, that would stop all of this nonsense straight away.
Phrases such as "instructor gangmasters" are emotive nonsense. There is no malevolent force at work here, only people trying to get paid a fair wage for a job that requires a large amount of expensive training and hard bloody work.
If anything it is attitudes like yours that keep this industry in the Victorian dark ages in terms of staff relations, development and customer retention.
Compare the flight training industry with virtually anyother and you'll see how utterly rubbish it really is. Aviation has always been backward and it's only since the rise of No-Frills carriers that the airline world has changed into something less than a basket case. You may not like O'Leary or Stelios, but they are bloody good businessmen and they keep a lot of people in work and have opened flying up for all. They have done this by keeping costs down, but also by getting more people into their a/c. Again, by spreading the cost over more people, it gets even cheaper. Leading to more and more people. Which further reduces the cost.............
One last thing, do you have a 5 year plan? If so, is it to expand, get better a/c, more facilities and corner a market place, or is it just to survive?