Stick and Carrot

Even if the families were aware of the hardships, would they dare to challenge the Azure Dragon Sect, the group that allowed them to trade in large cities? They were forced to balance their personal gains with the wellbeing of their young members in the sect.

The sect's membership gave them respect among other clans. Despite their members in the sect working hard, it didn't affect the family's reputation. Having a member in the Azure Dragon Sect was an honor.

They might have hoped that their members would withstand the tough conditions, survive, and eventually rise to prominent positions within the sect. If they survived and became stronger, they might even become elders of the sect, giving their clans more power and respect.