CASE 15.2 School of Rock: Filling a Gap in Music Education and Growing via Franchising

• Web: www.schoolofrock.com • Facebook: School of Rock • Twitter: SchoolofRockUSA

Bruce R. Barringer,

Oklahoma State University

R. Duane Ireland,

Texas A&M University

Introduction

In 1996 Paul Green, a University of Pennsylvania philosophy graduate, started giving guitar lessons in his home. At one point, he invited a group of his students to sit in, or "jam," with his own band. The results were initially disappointing. But over time, he found that the students who played in a group did better than the students who received only individual instruction. As a result, he modified his teaching methods to supplement individual lessons with group practices. He compared it to the difference between shooting hoops and playing basketball.

Green continued combining individual instruction with group jam sessions. In 1998, he decided to expand beyond his home, and opened the Paul Green School of Rock Music in Philadelphia. The building he chose had a number of small rooms for individual lessons along with a larger space for jam sessions and concerts. He also started organizing students, with similar skill levels, into bands. His top students were put into what he called the school's AllStars band. The band started getting gigs in the Philadelphia area, and attracted media attention. In 2003, filmmakers Sheena M. Joyce and Don Argott attended a concert by the students, and decided to make a documentary about the Paul Green School of Rock Music and how it transformed high school students into performing musicians. A film crew followed a class of students through a nine-month school year and produced a documentary titled Rock School. Shortly after the documentary was released, Paramount released a fictional film called School of Rock, which featured an aspiring musician teaching kids to play rock music. Many observers felt the film was based on Green and the way he worked with students.

Early Growth

By 2002, Green had more than 100 students, and decided to open an additional location in Dowingtown, PA, which is 35 miles west of Philadelphia. Expansion continued in counties around Philadelphia and then in New Jersey and Delaware. Along the way Green's dentist, Dr. Joseph Roberts, became interested in what Green was doing, and provided funding to open School of Rock locations in several additional states, including California, New York, and Texas. At some point along the way Green shortened the name of his business from the Paul Green School of Rock Music to the School of Rock.

In 2009, Green sold the School of Rock to Sterling Partners, a private equity firm. Sterling has kept the original vision for the School of Rock intact and has used its financial resources to fuel further expansion.

How It Works

Each School of Rock location provides a place for kids with a passion for rock music to either learn how to play a rock instrument or sharpen their existing skills. It's also a wholesome and safe place for kids to learn to play rock music and become part of a rock band. Beginning students enroll in the Rock 101 program, where they learn the fundamentals and do a foundation for success. The program includes weekly private instruction along with group rehearsals. More advanced students enroll in the Performance Program, which also includes weekly private lessons and band rehearsals involving more challenging music. The students are also placed into groups where they put on real rock shows at real music venues. The top students in each school become members of an AllStars band and tour nationally. A recent School of Rock AllStars band completed a 27-city tour, which kicked off at the Knitting Factory in Hollywood, CA. As a result of experiences like this, a number of School of Rock graduates are now performing musicians or are making a living in the music industry in other ways.

Most School of Rock instructors are music teachers who also play in an active band. From time to time, prominent rock musicians make guest appearances at School of Rock locations. The instructors help students hone their musical skills and inspire them with tales of their own successes and recoveries from failures. The company's foundational belief is that the best way to learn to do something is by doing it, so students are handed instruments and are playing rock music from the minute they enroll. The curriculum is formulaic, depending on a particular student's skill level, and is driven by the added motivation that students will be placed in bands and play in front of live audiences. The schools are set up much like a club, where students are encouraged to visit to jam, work on their songs with other students, form bands, or write original music. The school becomes a community for its participants, where they not only learn music but also form lasting friendships. Many students enroll for multiple 12-week sessions, where their skills are allowed to advance and flourish. The schools operate year-round.

Franchising

The School of Rock is a franchise organization. It currently has 16 company-owned units and 172 franchise locations, located in the United States and eight foreign countries. According to Entrepreneur magazine, purchasing a franchise costs between $113,100 and $334,600, depending on the location and the size of the facility. The costs include a $49,500 initial franchise fee. The ongoing royalty is 8 percent of gross income and there is a 3 percent ongoing ad royalty fee.

In exchange for the fees and royalties, the franchisees receive training in how to run a School of Rock location, along with IT support including a website, assistance with real estate selection, help with facility design, and ongoing marketing support. One third of all School of Rock franchisees own more than one location. To obtain a School of Rock franchise, you must commit to actively running and managing the location you acquire (i.e., no absentee ownership).

High-school students with an interest in the guitar, like this teenager, are ideal candidates for the School of Rock's program.

michaeljung/Shutterstock

New Programs

Along with its staple 12-week music instruction programs for 7- to 19-year-olds, the School of Rock is adding additional programs. It now has a program called Little Wing, after the Jimi Hendrix song by the same name, for preschool age children. The children participate in 45-minute, music-related activities by age group. There is a program named Rookies for first and second graders. This hour-long program is entirely group based, so kids learn how to play in a band from the start. There is now a program for adult amateur musicians called "Adult Performance Program" where adult students get individual lessons on guitar, bass, drums, keys, and vocals along with weekly band rehearsals. School of Rock also offers summer, winter, and spring break rock music camps, designed for musicians of all skill levels who play guitar, bass, drums, keyboard, and vocals. The camps are designed to hone music performance and ensemble skills in a fun and creative environment.

School of Rock Future

There are two factors to suggest a strong future for the School of Rock. The first is a reduction in music programs in public schools. Regrettably, as a result of tight budgets, a growing number of schools across the United States are cutting back on music programs. The School of Rock is poised to fill the gap. It is already the largest after-school music program in the United States. Second, there are currently 41.7 million kids ages 10-19 in the United States, all looking for a place to fit in and shine. The School of Rock offers a one-of-a-kind experience for 7- to 19-year-olds willing to commit to the rigors and joys of becoming successful musicians.

Discussion Questions

1. 15-37. What types of characteristics do you anticipate School of Rock looks for in franchisees?
2. 15-38. Look at Table 15.2. Of the ways mentioned in this table for franchisors to develop franchisees, which ones are the most important for School of Rock to emphasize to support its franchisees?
3. 15-39. If you were to consider buying a School of Rock franchise, what issues would concern you the most about your ability to be successful as a franchisee for this company?
4. 15-40. Over the next 10 years, what do you think lies ahead for School of Rock? What are some things that could go "right" for the firm and some of the things that could go "wrong" as the firm continues selling franchise locations as a means of growth?

Sources: School of Rock Homepage (www.schoolofrock.com) (accessed April 3, 2017); Wikipedia, School of Rock, www.wikipedia.com (accessed April 3, 2017); W. Boast, "A School for Brooklyn's Youngest Hipsters," New Yorker, May 12, 2014; Entrepreneur, School of Rock, available at https://www.entrepreneur.com/franchises/schoolofrock/333874-0.html (accessed April 2, 2017); D. Homan, "Small Business Snapshot: School of Rock," Business News Daily, October 3, 2016.