In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a School of Rock franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a School of Rock franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned School of Rock outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the School of Rock franchise opportunity

Section V – Presentation and analysis of School of Rock’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, highest, and lowest annual total sales for the 46 company-owned and 202 franchised School of Rock businesses (separately stated) that were open and operated at least five days per week during the full 12-month period from January 1, 2023 to December 31, 2023

• 2023 average, median, highest, and lowest total sales for the 202 franchised School of Rock businesses that were open and operated at least five days per week during the full 12-month period from January 1, 2023 to December 31, 2023, grouped by opening year (2022, 2021, 2020, and 2019 or prior years)

• 2023 average, median, highest, and lowest student enrollment for the 46 company-owned and 202 franchised School of Rock businesses (separately stated) that were open and operated at least five days per week during the full 12-month period from January 1, 2023 to December 31, 2023

• 2023 average, median, highest, and lowest student enrollment for the 202 franchised School of Rock businesses that were open and operated at least five days per week during the full 12-month period from January 1, 2023 to December 31, 2023, grouped by opening year (2022, 2021, 2020, and 2019 or prior years)

• 2023 average total sales, cost of sales, gross profit, management labor, admin labor, rent, marketing expense, IT expense, imputed royalties, other expenses, total expenses, and net operating income for the 46 company-owned School of Rock businesses that were open and operated at least five days per week during the full 12-month period from January 1, 2023 to December 31, 2023

Section VI – Key ratios, comparables, computations, and analyses for the School of Rock franchise opportunity (exclusive content for Platinum subscribers)

Section I – School of Rock Franchise Costs

• Initial Franchise Fee:  $49,900
• Initial Rent Outlays:  $13,750 to $21,250
• Site Selection and Leasehold Improvements:  $207,500 to $362,500
• Furnishings and Finishings:  $14,000 to $26,000
• Equipment:  $26,000 to $32,000
• Security and Cameras:  $11,000 to $25,000
• Signage:  $7,000 to $14,000
• Supplies:  $1,000 to $2,000
• Pre-Opening Training:  $1,250 to $2,000
• Advertising:  $10,000 to $12,000
• Opening Inventory:  $3,000 to $4,000
• Computer/Software:  $4,000 to $8,500
• Permits and Licenses:  $1,000 to $5,000
• Architectural Fees:  $10,050 to $15,000
• Prepaid Insurance Premiums:  $750 to $2,000
• Utility Costs and Deposits:  $600 to $1,500
• Miscellaneous Opening Expenses:  $5,500 to $11,000
• Additional Funds for 3 Months:  $21,000 to $70,000
• Total Estimated School of Rock Franchise Costs:  $387,300 to $663,650

Section II – School of Rock’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $49,900
• Royalty:  8% of Gross Sales
• Brand Fund:  3% of Gross Sales
• Advertising Cooperative:  up to 3% of Gross Sales (as determined by the Cooperative)

Section III – Number of Franchised and Company-Owned School of Rock Outlets

Franchised

2021

• Outlets at the Start of the Year:  184
• Outlets at the End of the Year:  199
• Net Change:  +15

2022

• Outlets at the Start of the Year:  199
• Outlets at the End of the Year:  211
• Net Change:  +12

2023

• Outlets at the Start of the Year:  211
• Outlets at the End of the Year:  234
• Net Change:  +23

Company-Owned

2021

• Outlets at the Start of the Year:  47
• Outlets at the End of the Year:  44
• Net Change:  -3

2022

• Outlets at the Start of the Year:  44
• Outlets at the End of the Year:  47
• Net Change:  +3

2023

• Outlets at the Start of the Year:  47
• Outlets at the End of the Year:  47
• Net Change:  0

Section IV – News Updates on the School of Rock Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the School of Rock Franchise (Item 19, 2024 FDD)

• In this Item 19, School of Rock presents historical performance information for the (a) 46 Company-Owned Schools that were open and operated at least five days per week during the full 12-month period from January 1, 2023 to December 31, 2023 (the “Company-Owned Designated Schools”) and (b) 202 franchised Schools that were open and operated at least five days per week during the full 12-month period from January 1, 2023 to December 31, 2023 (the “Franchised Designated Schools”).

• School of Rock refers to the Company-Owned Designated Schools and Franchised Designated Schools collectively as the “Designated Schools.” All Designated Schools operate under the name “School of Rock” and conduct a business similar to the type of business that you will operate.

• As of December 31, 2023, there were 47 Company-Owned Schools in operation. Of these 47 locations, 46 Company-Owned Designated Schools are included in this Item 19.

• The 46 Company-Owned Designated Schools do not include one franchised School acquired by School of Rock or its affiliates from a franchisee that became a Company-Owned School in 2023. This Item 19 also does not include one Company-Owned School that closed in 2023, which had been open at least 12 months prior to closing.

• As of December 31, 2023, there were 234 franchised Schools in operation. Of these 234 locations, 202 Franchised Designated Schools are included in this Item 19.

• The 202 Franchised Designated Schools do not include (a) seven franchised Schools that were open less than five days per week and (b) 25 franchised Schools that opened in 2023. This Item 19 also does not include (i) one franchised School acquired by School of Rock or its affiliates that became a Company-Owned School in 2023 and (ii) one franchised School that closed due to a non-renewal in 2023, which had been open at least 12 months prior to closing.

• In this Item 19, “Total Sales” means all revenue generated at, from or in connection with the operation of the School, including from sales (net of discounts) of all products and services conducted at, from, or with respect to the School.

• Total Sales does not include the sale of products or services for which refunds have been made in good faith to customers, the sale of equipment or furnishings used in the operation of the School, or any sales taxes or other taxes collected from customers and paid directly to the appropriate taxing authority.

• School of Rock includes gift certificate, gift card, or similar program payments in Total Sales when the gift certificate, gift card, other instrument, or applicable credit is redeemed.

Part 1 – Annual Total Sales in 2023 for All Designated Schools

• Part 1 provides the annual Total Sales for all Designated Schools in 2023.

Company-Owned

• Average Annual Total Sales:  $858,602
• Number and Percentage of Schools at or Above Average Total Sales:  20 / 43%
• Median Annual Total Sales:  $773,652
• Highest Annual Total Sales:  $1,710,218
• Lowest Annual Total Sales:  $285,016

Franchised

• Average Annual Total Sales:  $669,409
• Number and Percentage of Schools at or Above Average Total Sales:  89 / 44%
• Median Annual Total Sales:  $647,986
• Highest Annual Total Sales:  $2,061,519
• Lowest Annual Total Sales:  $164,441

Part 2 – Annual Total Sales in 2023 for Franchised Designated Schools, Grouped by Opening Year

• Part 2 provides the annual Total Sales for all Franchised Designated Schools as of December 31, 2023. The Schools are grouped by the year in which the Schools began operating

Opened in 2022 (Operated 13-24 Months)

• Number of Franchised Schools:  13
• Average Total Sales:  $347,480
• Number and Percentage of Schools at or Above Average Total Sales:  4 / 31%
• Median Total Sales:  $272,637
• Highest Total Sales:  $1,104,300
• Lowest Total Sales:  $164,441

Opened in 2021 (Operated 25-36 Months)

• Number of Franchised Schools:  16
• Average Total Sales:  $562,884
• Number and Percentage of Schools at or Above Average Total Sales:  8 / 50%
• Median Total Sales:  $533,603
• Highest Total Sales:  $1,069,503
• Lowest Total Sales:  $303,182

Opened in 2020 (Operated 37-48 Months)

• Number of Franchised Schools:  16
• Average Total Sales:  $630,457
• Number and Percentage of Schools at or Above Average Total Sales:  6 / 38%
• Median Total Sales:  $569,588
• Highest Total Sales:  $1,166,218
• Lowest Total Sales:  $400,774

Opened in 2019 or Prior Years (Operated 49+ Months)

• Number of Franchised Schools:  157
• Average Total Sales:  $710,891
• Number and Percentage of Schools at or Above Average Total Sales:  68 / 43%
• Median Total Sales:  $550,406
• Highest Total Sales:  $2,061,519
• Lowest Total Sales:  $179,479

Part 3 – Student Enrollment for All Designated Schools as of December 31, 2023

• Part 3 provides the average and median student enrollment for all Designated Schools as of December 31, 2023.

Company-Owned

• Average Enrollment:  213
• Number and Percentage of Schools at or Above Average Enrollment:  21 / 46%
• Median Enrollment:  204
• Highest Enrollment:  408
• Lowest Enrollment:  72

Franchised

• Average Enrollment:  185
• Number and Percentage of Schools at or Above Average Enrollment:  88 / 44%
• Median Enrollment:  179
• Highest Enrollment:  506
• Lowest Enrollment:  62

Part 4 – Student Enrollment for Franchised Designated Schools as of December 31, 2023, Grouped by Opening Year

• Part 4 provides the average and median student enrollment for all Franchised Designated Schools as of December 31, 2023. The Schools are grouped by the year in which the Schools began operating.

Opened in 2022 (Operated 13-24 Months)

• Number of Franchised Schools:  13
• Average Enrollment:  124
• Number and Percentage of Schools at or Above Average Enrollment:  4 / 31%
• Median Enrollment:  102
• Highest Enrollment:  297
• Lowest Enrollment:  62

Opened in 2021 (Operated 25-36 Months)

• Number of Franchised Schools:  16
• Average Enrollment:  165
• Number and Percentage of Schools at or Above Average Enrollment:  7 / 44%
• Median Enrollment:  154
• Highest Enrollment:  338
• Lowest Enrollment:  78

Opened in 2020 (Operated 37-48 Months)

• Number of Franchised Schools:  16
• Average Enrollment:  167
• Number and Percentage of Schools at or Above Average Enrollment:  7 / 44%
• Median Enrollment:  161
• Highest Enrollment:  287
• Lowest Enrollment:  97

Opened in 2019 or Prior Years (Operated 49+ Months)

• Number of Franchised Schools:  157
• Average Enrollment:  193
• Number and Percentage of Schools at or Above Average Enrollment:  64 / 41%
• Median Enrollment:  166
• Highest Enrollment:  506
• Lowest Enrollment:  83

Part 5 – Average Total Sales and Net Operating Income as a Percentage of Average Total Sales of Company Designated Schools in 2023

• Part 5 provides a profit and loss statement for the period from January 1, 2023 to December 31, 2023 for the 46 Company-Owned Designated Schools.

Total Sales:  $858,602 (100.0%)

Cost of Sales:  $287,828 (33.5%)

Gross Profit:  $570,775 (66.5%)

Operating Expenses

• Management Labor:  $99,289 (11.6%)
• Admin Labor:  $47,594 (5.5%)
• Rent:  $85,772 (10.0%)
• Marketing Expenses:  $35,035 (4.1%)
• IT Expense:  $4,141 (0.5%)
• Imputed Royalties:  $68,688 (8.0%)
• Other Expenses:  $50,183 (5.8%)
• Total Expenses:  $390,701 (45.5%)

Net Operating Income:  $180,073 (21.0%)

• The Highest Total Sales in 2023 was $1,710,218. The Lowest Total Sales in 2023 was $285,016.

• Cost of Sales is an amount that reflects the direct costs of the Company-Owned School to deliver services to customers. It includes, but is not limited to, the cost of teacher wages, teacher wages’ payroll taxes, merchant processing, show productions costs, tour expenses, music supplies, merchandise costs, and other program expenses.

• Gross Profit is Total Sales minus Cost of Sales.

• Operating Expenses include the day-to-day costs in conducting the normal business operations for the Company-Owned School.

• Management Labor includes wages, taxes, and benefits and other employee expenses paid to the General Manager employed by the Company-Owned School. Management Labor excludes profit sharing expense, as this would not be paid by a franchisee.

• Admin Labor includes wages, taxes, benefits, and other employee expenses paid to employees of the Company-Owned School, excluding those expenses that are not directly related to the teaching of the students (which are included in cost of sales) and excluding Management Labor.

• Rent includes the Company-Owned School’s base rent, extra lease charges (such as common area maintenance (CAM) charges), real estate taxes, deferred rent, and related real estate charges.

• Marketing Expenses includes, but is not limited to, Brand Fund contributions, local marketing, and advertising expenditures.

• IT Fees are a flat fee in all Schools.

• Imputed Royalties reflect the royalty fees (8% of Gross Sales) that are not actually paid by a Company-Owned School but would be paid to School of Rock if the School was a franchised location.

• Other Expenses includes all other operating expenses, including, but not limited to, utilities, insurance, licenses, permits, repairs, professional fees, additional equipment, and other additional expenses.

• Total Expenses is the total of Admin Labor, IT Fees, Management Labor, Marketing Expenses, Rent, and Other Expenses.

• Net Operating Income equals Gross Profit minus Total Expenses and does not include taxes or depreciation.

• Some Schools have sold or earned this amount. Your individual results may differ. There is no assurance that you will sell or earn as much.

• To make the financial performance representation in this Item 19, School of Rock relied on the Total Sales and student enrollment information collected through its billing and accounting system.

Section VI – School of Rock Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️