Rob Price

Rob Price is the CEO of the School of Rock.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:08):
Welcome, Welcome, Welcome back to the Bob Left Sets podcast.
My guest today is Rob Bright's CEO of the School
of Rock. Rob. How many schools of Rock are there?

Speaker 2 (00:23):
Not enough, Bob? But today we've got three hundred, just
under three hundred and forty around the globe in fifteen
countries altogether.

Speaker 1 (00:33):
Okay, And how many are owned by School of Rock
or they all franchised? How does it work?

Speaker 2 (00:38):
We operate forty six of the schools. Those are exclusively
in the US, scattered about in key markets, but the
rest are franchised all through the US and internationally.

Speaker 1 (00:53):
So let's say I want to have a franchise, walk
me through it.

Speaker 2 (00:58):
Well, you know what's interesting is we tend to appeal
to people who've never done a franchise before, because ours
is really a purpose driven passion area where folks arrive
at their interest in School of Rock either having been
a parent of a student student themselves as an adult student.

(01:19):
They may have seen one of our bands perform, they
may be a fan of the movie and and come
across come across our franchise, so they'll reach out to us,
and there's there's a there's kind of a long dating process.
We want to find out the intent. We want to

(01:41):
understand if they're doing this for the right combinations of
changing the world and and doing something that's economically viable,
and then we step through a series of discussions that
can take weeks or even months to make sure that
the match is there. In some ways, it's really similar
to other franchise businesses. In other ways it's really different

(02:04):
because we are searching for people who have an equal
amount of an interest in return on effort as return
on investment. People are really looking to bend the universe
by transforming lives through music.

Speaker 1 (02:21):
Okay, so let's assume I'm excited. What is the deal
I'm going to get with you? And is every deal
the same or is every deal unique?

Speaker 2 (02:31):
Yeah, the deals are all the same. We've got standard
economics that have a initial franchise fee that's just under
fifty thousand dollars, and then the economics going forward, there's
the startup costs. There'll be the construction, they'll be build
out soft costs, architecture, et cetera, et cetera, to build

(02:53):
a unit that is physical unit, physical school about twenty
five hundred square feet, and then going forward, once that
school opens. The transactions are as follows, is that we
earn a eight percent royalty and we earn a three
percent brand fund that we spend on behalf the franchise ease,

(03:18):
on paid marketing, and on infrastructure, and then the rest
of the residual economics flow through to the franchise e.
And you know, many of our franchises choose to do
more than one, but about three quarters of our franchisese
are single unit franchisees and most are owner operators.

Speaker 1 (03:39):
Let me ask you, I've always been interested same thing
with royalties in the music business. Okay, ultimately you're getting
the better part of ten percent. How do you make
sure you get your money?

Speaker 2 (03:50):
Yeah, it's a it's a great question, and that's that's
a challenge for some franchises. For us, we have an
integrated point of sale system. We have a monthly subscription
for our services at the individual school level, so a
parent or an adult student will will kind of sign

(04:11):
up for renewing participation, hopefully in our performance program, which
I'm sure we'll talk about, and as those transactions happen,
the royalties are automatically dispersed to School of Rock, so
we don't really have any collections issues, and frankly, our

(04:32):
franchisees of such high integrity, I don't even imagine if
we were in a scenario where the technology wasn't our friend,
where we would've got a high degree of professionalism within
the community. But thankfully we don't have to face that
uncertainty because it all happens in an automated way.

Speaker 1 (04:52):
Now, have any franchises gone billy up or has the
parent organization need to reclaim them?

Speaker 2 (05:00):
We have had an extraordinary situation. You know, you will
typically see in most franchise systems that you will see
a meaningful number on a percentage basis, maybe three four
five percent of the system might fail in a given year.

(05:20):
We are well below one percent in our history, and
that's a source of extraordinary pride, especially given COVID. I mean,
COVID should have put us out of business entirely. So
we've only had a few circumstances where we've had where
we've had schools close their doors, and in many circumstances

(05:45):
where there is some concerns that a school has, they're
able to transfer it to another enthusiastic perspective franchise e,
and in some cases we've acquired schools, but we don't
typically acquire schools to operate that are not strong performers.
We like to buy schools that are great performers, that

(06:06):
we think have substantial upside potential. So I, you know,
knock on wood. I'm not sure if I'm in a
room with any real wood. But the thankfully, we have
not had the kinds of situations that many multi unit
operations have where we see periods or even averages of

(06:27):
meaningful reduction over time.

Speaker 1 (06:30):
Okay, so you get someone who's interested, they have the money.
You know, when it comes to cost structure and a
successful business, location is very important. So to what did
we as a parent organization involved in location?

Speaker 2 (06:46):
It's incredibly important and it's really good instinct that you
ask that because it's not obvious. You know, we think
when we were kids, you didn't think about visibility or
location for music lessons or youth and Richmond activities. It
was word of mouth and you'd hear it from your
neighbor or a church or synagogue or whatever. Get you

(07:07):
just get a hunch where to go for the things.
For kids today, locations really important. We provide a we
have a kind of preferred partnership with a national real
estate site selection firm that helps the franchisees facilitate the
selection the negotiation of their leases. They're not obligated to

(07:33):
use it. We don't participate in the economics, so we
can be an honest broker in regards to making that connection.
We approve each site, so we also use our own tools.
We've got a really really extensive statistical model that we
use that takes all the sites that we have today,
evaluates what makes them successful, and that gives us a

(07:55):
sense for where we should put a school in a
given part of a territory and even more specifically which
street or which shopping center based on the data that
we have. So we've got a lot of support for that.
And then of course there's always art to the sciences,
as you know, you know, the location is something that
a local entrepreneur, a local community member may know a

(08:19):
little bit more about than even a broker. They may
know what's happening from a residential development standpoint, they may
know where the schools are. And then those weird dynamics
where somebody may not drive past this highway because that's
just not where we drive or morning side of the street,
afternoon side of the street, et cetera. So we're very

(08:41):
very active in the selection or in the help of
the selection of the locations because we want these to
be of enduring value. We want them to be successful
for decades, not just for the next five years.

Speaker 1 (08:55):
Okay, what are some of the criteria that make a
location successful.

Speaker 2 (09:00):
Well, you know, we tend to focus in areas that
have combination the following attributes, high disposable income, high percentage
of kids, and where there's enough aggregate population to provide

(09:22):
you know, enough of a rich target set for just
enough people to populate the school. And then beyond that,
we always in the territory. Since we're performance based and
our real product is producing young performers. How that comes
to life is in venues. So we'll always look at

(09:43):
what the venue configuration is in a given territory and
make sure there's enough proximity and magnitude of venues. We're
huge fans of independent venue operators in part because we're
really dependent on strength of that community to make sure

(10:03):
that we've got these sweet spot sizes of the two hundred,
three hundred, four hundred seat venues. And so we take
that into consideration as well, and then it gets down
to really specific things bob visibility, co tenancy. We do
well as you can imagine near places like a Whole

(10:24):
Foods and where there's other things for mom to do.
Once she drops her young artist off at the school,
we want her to be in a position to go
do her thing, be convenient, come back when that kid's
a little more proficient and a little happier.

Speaker 1 (10:45):
Okay, how many of the franchisees is this their primary
mode of income?

Speaker 2 (10:53):
We don't have good data on that, so I can
only give you an anecdotal answer to it. Would suspect
that the majority it is, but I'm not certain that
it would be the vast majority. We have a mix
of both. And what's what's interesting is that I'm often asked,

(11:13):
is the success model in our franchise system single unit
or multi unit owner operator versus passive operation? And if
you map our units, we've got we've got schools in
every one of those categories, and we've examples where the
unit economics and the customer satisfaction are super high. So

(11:37):
the answer is that while it's most most is the case,
we are not exclusively focused on that because if you
can build a team as a investor or a more
passive operator, and build a team that has passion like
they're the they're the owners themselves, this can be a

(11:59):
very very very successful, more passive ownership model. We always
want the owner to be engaged. They should be there
at the shows. They should be making sure that the
facility and the culture and the core operations are excellent.
But I think that ultimately we're actually open to all

(12:22):
of the different models, which may be a little different
than some other franchise systems.

Speaker 1 (12:27):
How much money can I make owning a school of rock?

Speaker 2 (12:31):
Well, the good news is we have some data in
our in our franchise disclosure document. I always to be
careful because the FTC could you know, you can see
on zoom I'm short and a little stout, so stripes
wouldn't look so good at me on me. So but
what one of the benefits we have in our franchise

(12:52):
disclosure document is I can report out the profitability of
our corporate owned schools with great precision. And I think
this year we're going to be We're going to be
delivering kind of a twenty percent ebit DAH margin on
average unit volume that is well north at seven hundred

(13:13):
thousand dollars per unit, so that takes into consideration even
if we were if we were paying ourselves royalties, we
adjust that percentage as if we were franchisees. So I
always recommend, and this transcends music, Bob, you know, I
always recommend when folks are looking at franchise opportunities. If

(13:35):
the institution doesn't have any company owned schools or company
owned units, and you can't get precise economics, it's hard
to gauge the likely return on investment. And then further,
if you don't get good P and L information from
existing franchisees who are comfortable and enthusiastic to share, those

(13:57):
two things are probably a good sign that it's something
to stay away from. In our case, we have really
extensive economics in our own schools, the corporate run ones,
and our franchisees are very comfortable sharing the good and
the bad of being a School of Rock franchise. Thankfully,
we've had remarkable growth over the last six years, comping

(14:21):
double digits every year, and even when you take COVID
into account, we have an annual compound annual growth rate
of our ebit in the double digits, which is really
terrific for our schools.

Speaker 1 (14:36):
Okay, let's say I've jumped through the hoops, I've signed
the agreement, I've found a location. Let's talk about physical
space that generally speaking, it's twenty five hundred or is
that the minimum? Does it vary? And once I get
the space, is there a specific blueprint such that every
school of rock I go in will be similar or

(14:57):
are they all completely different? Question?

Speaker 2 (15:00):
You know, there are some non negotiables we want in
that space. The right number of rooms for lessons individual lessons,
but just as importantly, the right configuration of our rehearsal rooms.
So the magic of what we do are preparing these
kids to do real rock and roll gigs, and we

(15:21):
need a great back line, we need great acoustics, We
need a space that gives the feel and the configuration
of a stage environment. And so every school will have
a minimum number of lesson rooms, minimum number of drum
rooms specifically because those have unique dynamics, and then a
minimum number of rehearsal rooms. And then, believe it or not,

(15:45):
one of the most important parts of the design is
a student lounge. We're really trying to become that third
space for kids, you know, kind of where Starbucks serves
the adult population. We want them as they're transferring between
songs or on a break from a given song in
their rehearsal, sitting in the lounge, comparing notes, learning how

(16:07):
to interact with each other. Is a lot of what
we deliver is not just the musical proficiency. It's civics.
It's the lessons on how to socialize. So to put
that to get back to your specific question, we do
have a specific configuration, but we're really flexible. That can
be a square space, that can be long and narrow

(16:29):
or shallow and wide. It can be two floors, it
can be on the second floor of a shopping center.
But we do have minimum criteria and twenty five hundred
is our target. We've done less in highly urban locations.
You know, Palo Alto is a location under two thousand

(16:53):
square feet, one of our highest volume schools, but we
really like to be at that twenty five five hundred
square feets. Some of our schools choose to do their
own mini venue inside the school, and that might add
another five hundred to seven hundred and fifty square feet.
We don't require it.

Speaker 1 (17:10):
Though, how many lesson room, how many drum rooms?

Speaker 2 (17:14):
Yeah, we like to have you know, in the seven
to eight range lesson rooms and to have two drum rooms,
so those will be double kits, and then our rehearsal
rooms will have drum kits in them. And we actually
the rehearsal rooms will have the full back line, so
our rehearsal rooms will also serve as lesson rooms at

(17:36):
high capacity times. So so think about it as you know,
ten individual lesson spaces and typically three group rehearsal areas.

Speaker 1 (17:48):
Okay, I've got the space, I've built it out, I've
got some furniture. Do I have to also purchase musical equipment?

Speaker 2 (17:56):
Yeah, we help. You know, we've become a gear supply
over the last six years, which has been an area
of great passion and interest. So we've established relationships with
all the major gear players and what we do is
we provide a recommended list of gear for starting up

(18:17):
and really for staging the school for operation. School owners
are not required to buy through our resources. They typically
do because we get wholesale pricing on their behalf, so
they'll get that into wholesale pricing. Will help coordinate the shipment,
they'll get a couple of palettes in largely from the

(18:40):
same locations, so that helps as well. And then in
addition to that, since we have these wholesale arrangements, we
also can resell to students, so we might have you know,
I come from an old retail family, so there's the
phrase one to show, one to go, which may ring

(19:02):
a bell. You know. We have that kind of mentality
for key, high moving units like a starter pack, a
fender or epiphone starter pack or drum pad and sticks.
But we can get everything up to a Moog grandmother
if if our customers need it. And so yes, we

(19:27):
are a conduit for really really competitively priced gear. We
see that as a meaningful growth opportunity for us going forward.

Speaker 1 (19:39):
What a local retailers in guitar center, major retailers say
about you going direct and cutting them.

Speaker 2 (19:44):
Out, well, the reality is that you know the the
I will project how I feel about them, and I
hope they feel the same way about us. Which is
that so much about driving assumption and creating a new
player that will be a long term customer for any

(20:05):
of ours is about continuity of performance and continuity of commitment.
So in the short term. Is there a risk that
I'm going to cannibalize Guitar Center's fender starter pack? Well, yes,
there's a zero sum game for the initial buyer. But

(20:27):
you know the old joke, what's the right number of
guitars to buy? The answer is always is one more.
And ultimately, guitar Center has a really important role to play.
Sweetwater is a really important role to play. And since
we are meeting customers at different parts of that customer journey,

(20:48):
and since we're physically located in really really different places,
a guitar center can never be located where a school
of Rock is because it's hard to find thirty thousand
square feet on you know, the upper east side of
New York on seventy first, whereas we can get a
two thousand square foot location. I think the other thing

(21:12):
is that, you know, our view is that we play
a really important role where which is diminishing in all
the retail environments, which is very high touch, high consultative sale.
So we have the opportunity where we're spending three hours

(21:33):
with our students a week. Even guitar centers, most fervent
shoppers don't stay there for three hours a week, So
we have this incredible opportunity to really do that kind
of Hogwarts matching exercise where we help a student meet

(21:55):
it's their perfect guitar, bass, keyboard, microphone, et cetera. And
I think that's something we're in a unique position to
do when we're having that much continuity, because we have
mentors musicians themselves, and they can say, this is why
I play the Fender, this is why I pay play
this SG, this is why I choose gretch, And I

(22:19):
think that that's a role we earn a position to
uniquely play that. Having been said, no one likes competition,
I'm not. I don't. I'm mindful of the fact Guitar
Center teaches lessons and their music and Arts subsidiary teaches lessons.
But if they're doing a great job and lessons, that's

(22:40):
great for society. So in the grand scheme of things,
I'm okay with that.

Speaker 1 (22:51):
Okay, In this transaction, in selling merchandise to the store
and to the customer, you are taking a spif you are.
This is a profit center, however minimal for the School
of Rock.

Speaker 2 (23:08):
It's a profit center for our schools, and it's we
largely just cover our cost at the retail level. We've
chosen in the configuration of our economics, We've chosen to
participate the wholesale level, so we don't actually charge a
royalty in our sales uh to for franchisees. So we

(23:30):
want them to capture as much of the gross margin
as possible. And franchisees within the limits of map pricing,
which you're familiar with, you know, they are allowed to
have certain flexibility to h to charge and advertise promote

(23:50):
certain pricing. We want to preserve as much of that
margin for them as we can. So I don't see
for us the idea of massive EBITDA transformation valuation transformation
by becoming a conventional retail player. Rather, I want to

(24:13):
reduce the friction to make sure that we're the best,
high touch, customized matchmaker between a young artist and their needs.
By the way this applies to our teachers too, is
that our teachers are all gigging musicians. We want to
put the best gear in their hands, and we may
be the only way they're going to get their hands

(24:33):
on an American strat as opposed to a lesser model,
because we can get it to the meta price, it's much.

Speaker 1 (24:41):
Lower Okay, so I'm opening a school of rock other
than the physical plant, how much am I going to
have to spend on equipment?

Speaker 2 (24:51):
Our equipment tends to be in the sort of twenty
to twenty five thousand dollars range, and naturally, at retail
value that would be a much higher number. But we
tend to try to outfit the schools for everything they
need to operate in that zone in terms of gear.
In terms of gear, naturally there'll be things like soundproofing,

(25:14):
there'll be millwork, furniture, et cetera, et cetera, And depending
that's mostly driven by square footage, your buildout will be
directly proportional to square footage, and typically, you know, it'll
be a little over one hundred a little over one
hundred dollars per square foot to build out a school

(25:37):
of rock in terms of construction in some markets, that
can be up to one twenty one thirty.

Speaker 1 (25:42):
Let's say I walk in the front door with my
parent and I'm sold, but I have no equipment. Is
there literally equipment in the store that I can buy
right that day or is it ordered? How do I
get the equipment in my hands?

Speaker 2 (25:57):
In most cases, our schools that are committed to our
gear program, they'll have two or three of the fast
moving units in each instrument, so they'll have a starter
guitar pack, they'll have a starter based pack.

Speaker 1 (26:14):
UH.

Speaker 2 (26:15):
They typically wouldn't inventory keyboards because it's just such high
cube it's hard in a small space to keep those around.
They certainly will have drums, drum sticks and UH and
practice pads and practice pads thank you. And then we'll
have mic and amp solutions, starting solutions with partners like

(26:40):
Shore who are who are great partners. That having been said,
many of our students start their journey before selecting their instrument,
and we're very very much in favor of that. So
our our way in by our little or we call

(27:01):
our Little Wing program our Rookies program. This is a
group learning environment where we're giving them the opportunity to
speed date with a range of instruments, so they may
come in with a bias to pick their forever instrument.
But we think that's actually one of the things that

(27:21):
has impeded success in music education is leaping too quickly
to an instrument that ends up not being the right
one emotionally or physically for the student. So it's a
very rare circumstance where immediately someone comes in and they
don't have an instrument and they need it immediately. But

(27:43):
when we do, we can get it with great haste.

Speaker 1 (27:46):
Let's say that you know, I'm a dedicated student. Are
you selling strings, straps picks that kind of stuff?

Speaker 2 (27:55):
We are? We are, And that's pretty universally provided all
of our schools and again comes through the same supply
chain for us. And you know another one that's great
for us we're really proud of is hearing protection. Huge area.
We try to make sure every one of our kids

(28:16):
from the very get go understands the importance of it.
And in our rehearsal rooms we require hearing protection as
a mandatory item. So we'll also sell some really good
brands like Erasers in our schools.

Speaker 1 (28:30):
Okay, I'm down the line, I signed my agreement, I
have my equipment, I've built out my space. What do
I do for personnel? How many people do I need?
What kind of structure, what kind of payment? Where do
I find them?

Speaker 2 (28:46):
Yeah, it's the most important question because the software of
our business makes or breaks it. We don't have a
complex technological footprint, we don't have a complex lex build out.
It's got its uniqueness with sound attenuation, but the software
the people is really really important. The beauty of our

(29:10):
model is that we favor gigging musicians as our staff members.
We don't favor necessarily folks who have ten years fifteen
years in traditional music instruction because we are upending the
model of music instruction. We want happier kids who stay

(29:33):
with their instruments longer, that have the subsidiary benefits of
learning not just music but how to perform. And so
as you probably know, you know, you don't have to
go you don't have to go beyond your local Starbucks
to find a you know, proficient gigging musicians. And so

(29:54):
there's a high degree of supply in all major markets
in the world of people who are passionate musicians. And
depending on the age of the student, the level of
proficiency can range. So to your quantitative questions, school might
have twenty people on the payroll, most of those are

(30:15):
part time. There may be only one full time salary
team member as a general manager. And in an owner
operator school, that might be the owner, and there'll be
a music director that will be somebody who's more advanced
in terms of teaching and their organization skills and their

(30:36):
leadership skills. They really administer the pool of instructors. And
then we'll typically have one or two administrative staff who
are greeting people as they come in, helping navigate leads,
giving tours, administering billing, et cetera, et cetera. So it's

(30:57):
a really good compliment to the gigacon to me for
real gigging musicians. And so the first hire is typically
if you're an owner operator, is hiring that really really
well networked, well connected, very responsible music director. You bring
them on board a couple of months before opening, and

(31:20):
then they're usually so plugged into the local community they
can be the trojan horse to get us the amazing
talent to come in. And we've got a very methodical
curriculum and technology tools to make it really easy for
people who've never taught before to be incredibly successful music instructors.

Speaker 1 (31:43):
You know, as an instructor, not as the person who's
an overseer manager. How much money am I going to make?

Speaker 2 (31:50):
Well, we're we tend to be in the space which
is north of what they would get in the service economy,
and so both of what they would get as individual teachers,
so you might see you know, I can't give a
precise number because our franchisees economics aren't necessarily obvious to us,

(32:16):
but will typically be in the high teens early twenties
on an hourly rate. That'll differ in different markets naturally,
because you go to a Greenwich, Connecticut, it will be
very different than a Lubbock, Texas, where we have schools
in both of those markets. But we tend to be
very competitive with what musicians part time jobs can provide

(32:42):
to them. And then some schools also provide incentives and
bonus bonuses to the instructors that can increase their comp
if they're doing a show, if they're one of our
show directors, they may get a bonus for that, they
may get a bonus for retention, et cetera, et cetera.

(33:04):
We like to see that, but that varies quite a
bit through the system. But we don't target. We don't
compete against the price or the cost or the income
that a private instructor would have. For very practical reasons,
we're taking all of the administrative complexity, all of the liability,

(33:26):
all of the operational distractions, the scheduling, even the place,
the gear and the lead getting part off the shoulders
of the individual instructors. So we do see quite a
few traditional instructors who pursue coming aboard School of Rock,

(33:48):
but we're not dependent on that cohort as a source
of labor for us.

Speaker 1 (33:55):
Okay, what's the life span of an employee.

Speaker 2 (34:01):
Well, we have probably about half the churn of conventional retail,
so we we have since we have tend to have
younger team members. We team we have team members who
are touring, going out on tour. As a matter of course,

(34:24):
we'll understand that and we'll accommodate that. We will see
probably an average lifetime, an average life cycle for you know,
seven to nine months of a given team member. That
differs dramatically whether it's a general manager or a frontline
instructor or one of our administrative team members. But that

(34:46):
would be a good bogie. And since our students are
so keyed into our two hour rehearsal each week, where
the attachment it's to the brand and to the band
and to the goal of the show, it's not catastrophic

(35:07):
to us when one of our team members has the
opportunity to go tour that we don't have to be
agonizing about them. Departing always requires good succession management. You
want to make sure you're not leaving your kids high
and dry. But it's not uncommon for one week a
different instructor to come in and our kids tend to
really dig that because they'll say, hey, this is real

(35:29):
jazz oriented bass player. I'm learning a completely different side
of the instrument. So but thankfully, even though we do
largely compete with hospitality, we have much better retention of
our team members because it's a community for them too.
This is a place where they're going to be with

(35:51):
other musicians and other really purpose driven team members.

Speaker 1 (35:55):
Okay, I'm building out. To what degree is sound reinforce
meaning deadening, et cetera. Or neighbors complaining? Is this an issue?

Speaker 2 (36:05):
It's one of It is the most important topic on
the build out. It's less important if you have a
standalone unit, but if you're in the middle of a
shopping center. We deploy a lot of expertise. We have
relationships with vendors. We even have consultants on on on

(36:27):
call who have now helped dozens and dozens scores even
of schools navigate through specific issues and those can be
everything from how sound travels through an air conditioning unit
to raised floors. But we have in our design guidelines

(36:51):
super specific recommendations in terms of double drywall and green
glue and and uh. And then we have certain requirements,
and then we have certain nice to haves that we
give our franchisees the opportunities to navigate through. We've been
really lucky in that now. It wasn't always like this,

(37:11):
but now we're in a situation where we know how
to mitigate the sound, and we know how to administer
the relationship with the landlords and neighbors so that it's
not contentious. Some of it is even setting explicit decibel requirements,
which is we will commit to not being above this

(37:31):
level of sound that'll be well below with municipal limits
are But yeah, it's a big It's the only really
complex part of our construction is sound attenuation. The rest
is drywall, framing, carpeting, painting, electrical plumbing, very standard stuff.

Speaker 1 (37:50):
Okay, I've jumped through all the hoops, signed the agreement,
built out, have a staff, have the sign on the door.
How do I start the business?

Speaker 2 (37:59):
Well, well, you ask a question that almost need to
challenge the premise, which is that our view is the
business starts the day you sign the agreement. And that's
been one of the things that's been a transformation for
us is that the marketing and the community relationship that
you can establish anticipating opening is really rich. So what

(38:24):
we always ask our franchisees to do is immediately stop
start mapping your community. Map, the schools map, the mom's clubs, map,
the local activities like art box and farmers' markets. Get
to know businesses that are going to be adjacent to you,

(38:47):
because sometimes they'll be your first students. Your landlord often
will have a child they want to send him to
School of Rock. That's a great place to start. And
so what we always try to do is actually have
twenty or thirty students pre enrolled, so unlike a lot
of franchises, we actually try to start off with revenue

(39:08):
from day one, and so now beyond that we are
doing the way to think about it is that we
run at the corporate level the air war for our franchisese.
We'll do digital, paid and earned media, We'll do seasonal campaigns,

(39:32):
and we'll do always on campaigns, will do very very
sophisticated prospecting and targeting on our individual school's behalf, but
we're counting on the franchisees and the local company school
teams to do the ground warfare, which is we want
them to be everything from that a frame outside of

(39:52):
the school to the lights coming out from the school,
to setting up that table with what we call the
instrument petting zoo at the children's festival, or you know,
going to the art walk and having your kids play
at the event. That's really where the source of leads are.

(40:15):
And we've have very very precise mechanics of doing our
lead gathering, so we know at any time how well
situated a school is for longer term success based on
their lead flow and their conversion dynamics. We do that
very scientifically.

Speaker 1 (40:36):
I know everybody enters the program in a different fashion,
but let's start with some examples. I walk in the
front door. That's it, no pre existing relationship.

Speaker 2 (40:47):
What happens, well, naturally, somebody who walks in the door
probably has self selected that they're interested in music education.
So it's a circumstance where we don't have to convince
them about what class of trade we're in. The very
first thing we begin to explain before we do the
tour is we're performance based music education. So if you're

(41:11):
looking for lessons only, we might recommend you go someplace else.
And we think that the efficacy of our model is
so much better that we don't want to clog it
up with folks who are interested in just the most
conventional weekly lesson where they're you know, the it's practice

(41:34):
with the hope someday of something like a recital. So
at the very first part of that conversation, we're saying,
here's who we are. What we are is that we're
going to have a transformational experience for your kid, typically,
and that transformational experience is anchored in them joining a
band and joining the Zeppelin Show or the Green Day Show,

(41:58):
or the Women in Rock Shaw or the Blue Origin
of the Blues show that's enrolling right now. We're casting
right now for that show. The show is going to
be in three months. We'd love to have your kid,
if they're already doing music, already having some functional capability,
and we'll give you weekly lessons as part of that.

(42:20):
That's really how it begins. And then we take them
around the school and we show them how the physical
facility delivers that to them in an incredibly immersive environment.
Typically they'll be seeing a rehearsal going on or an
individual lesson going on. They'll get to see the happy
kids bouncing around the school, and they'll get to do

(42:45):
a trial lesson where they get the experience of what's
our teaching method, and then we'll show them our curriculum.
Depending on the musical ability of its parent, they may
have a model in their head of how they earned
the Alba books or how entered books. We have our
own curriculum which we think is really differentiated and that

(43:07):
really blows people away when we show them the physical
and the digital parts of our curriculum. And honestly, Bob,
when we can get a prospective student in the school,
we have an amazing hit rate of convincing people that
this is something unlike, certainly unlike they had when they
were kids.

Speaker 1 (43:29):
Now.

Speaker 2 (43:29):
A different scenario is when we have a really novice
player and there we introduce them, depending on their age,
to either our little Wing program which is sort of
four to six or our Rookies program, which is more
like the six to eight year old level. But again
we're working them towards enrolling in the performance program and

(43:54):
being ready to get out on stage as soon as possible.

Speaker 1 (44:04):
Okay, so what is your teaching method?

Speaker 2 (44:07):
So it starts in reverse. So when you and I,
you know, we're exposed to music as kids. I was
a keyboard player and my teacher was missus van Acker
rest her soul, a wonderful woman who was very dedicated,

(44:30):
and I trained classically. As many of the listeners, I
think that would be their experience, and it was skill first,
So building up and basically saying you're going to learn
grammar before I sent you into conversation, and we're certainly
not going to put you in a room of other

(44:52):
people speaking until we're absolutely certain that you are articulate
and you know the letter names and you know the
parts of speech, et cetera, et cetera. That is one
way to learn. It happens to be in contradiction to
virtually everything else we learn, though. It's not how we
learn sports, it's not how we learn socialization, it's not

(45:15):
how we learn to speak. So we have the reverse.
So our curriculum starts song first, and what we do
is that we build with the show that a kid
will then roll. Imagine fifteen kids. Sixteen kids in a
show season, and they're doing their weekly rehearsal and they're

(45:37):
cast on songs, and we cast them on the songs
using a database of our songs where we know the
level by instrument of that song. So we have a
very proprietary tool where we can take a level one
bass player and put them on a song with a
level five guitar player and they can coexist. And then

(46:02):
what we do is that we have in the same
massive database of these songs in our shows, we have
the skills that map to those songs. So a great
you know, great examples thunderstruck, you know that tune. The
last thing you want to do is talk about music

(46:22):
theory when you're teaching a kid thunderstruck. You just want
them to jam out. But what it gives us the
opportunity to do in the individual lesson is to say, hey,
you know that guitar solo. Did you know that's in
mix olidian mode? And they'll say, well, what's that? And
then we'll teach them mix Olidian mode, and for their

(46:43):
entire life, when they hear that configuration of notes, they'll
know mix Olidian mode much more so than somebody who's
taught the mode before they're taught to play the mode.
And so that's a really geeky music theory way to
answer the question. But we start with the show, to
the song, to the skill, and then our app reinhorses

(47:07):
those skills and maps it for the student's use to
preparing them for the show. So it's it's we sneak
the kids the music theory, the notation, the technique, but
it's all in service of their curiosity because they want
to just jam better. They feel a sense of group accountability,

(47:30):
and we think it's so incredibly novel in music, partially
because it's so universal in everything else. That's how you
and I learned to talk.

Speaker 1 (47:41):
Okay, I'm convinced I signed up. I would think that
my first meeting is with my teacher. So let's just
assume I have some skill. I'm not a complete Okay, yeah, okay,
I meet with a teacher. What goes down in that lesson.

Speaker 2 (48:00):
Well, it may be that your first meeting is with
your band, so you may actually have your rehearsal first,
but in either case, typically in rapid succession, you're going
to meet with an instructor who's really well equipped to
teach your level of your instrument, and you'll be signing
up for a show. So part of the choice for

(48:21):
customers what shows you doing this season, And that'll be
a little bit of a matchmaking because we'll have certain
needs still in given shows where it's easier to cast
that instrument, and then others may be more fall But
let's say they choose to be part of the pop
punk show, so they want to do you know some

(48:43):
forty one and Green Day, and we're casting for that show.
We've got a great role. So within a couple of
days they'll spend they'll have a thirty or forty five
minute lesson with their teacher, talk about their goals, do
a little bit of demonstration, which is just let's see

(49:04):
how you hold your instrument or how you navigate at
your vocal instrument. Let's see your technique. So the first
lesson typically is an assessment just where do you stand?
But that second lesson, Bob, they're supporting that student's proficiency
and technique to be ready to rock on stage. It

(49:27):
is all about preparing the songs for the show. Now,
we'll have circumstances if a kid's actually auditioning for Berkeley,
or if a kid wants to get into jazz band
at their school, will help the kid with any of
those tasks. But the lesson really is about reinforcing the
repertoire that they're working on for the show, and that

(49:51):
I really think that starts at lesson number two. Lesson
number one is just getting to know you session.

Speaker 1 (49:56):
Will I end up knowing how to read music.

Speaker 2 (50:01):
If you want to, we will, as I always qualify
that because there are some students who choose not to
learn that way. There are some students who can't learn
that way. But we are equipped and we are very
dedicated for all of our students not only knowing how

(50:21):
to read music, but we also want them to read
tablature where it applies. We want them, if they're vocalists,
to do be able to do solveggio. We want them
to know at least the basics of music theory. And
so I you know, I'm very passionate about this as

(50:42):
a trained musician. Most of our leadership team or trained musicians.
We don't want to be a casual educator of music.
We want to be accessible, but we don't want to
be casual to lower the friction increase retention, but we

(51:03):
don't want to do it at the expense of not
giving people nutrients musically. So our goal is for every
one of our students to be able to read notation
and do a lot more than that, and our curriculum
has that explicitly as part of the mechanics. We have
twenty five method books, we have hundreds and hundreds of

(51:24):
exercises in our app and they all build to musical literacy,
musical proficiency, technique, music theory.

Speaker 1 (51:35):
Let's just say I walk in, I have a starter
Fender guitar. I can play all the basic chords A
through G, maybe A minor, E minor. What's going to
happen in the lesson? I realize we're building towards the show,
But is that is the teacher just going to say, well,
this is the lead, you have to play and teach

(51:56):
me how I mean, what's going to happen?

Speaker 2 (51:58):
It's always a mix because and again let's let's uh,
let's use a scenario, which is that's actually an incredibly
appropriate scenario for me. You just described my guitar proficiency.
Sadly I don't have the same proficiency and guitars as keyboard.
So when when someone like me will go in hopefully

(52:21):
we'll join the adult band. And of course you'll be
working towards those dimensions, but in every circumstance you're stopping
on the theoretical component to linger on developing that, which
is that, Uh, you're going to be playing a song
with the pentatonic scale. That's the source of all blues scales,

(52:43):
all basically almost every blues, every guitar solo on the
planet in a popular song. So what the teacher will
do is linger on that and also give you an
exercise for the the different shapes of the pentatonic scale
on the fret board, and that may be the exercise
you're assigned for the next week as you're working on

(53:05):
honky Tonk women, So they'll be complementary, but it won't
necessarily be entirely enveloped or enveloped I should say by
the song. There's also about teaching the skill that the
song introduces, but not limiting the song's application to it.

(53:26):
So you may say, Okay, the first things that you're
going to work on for the next few weeks is
mastering being able to do the pentatonic scale without looking
at the fret board. Which is about as far as
I've gotten by.

Speaker 1 (53:38):
Okay, yeah, every all of us who took lessons at
our younger age. There's the lesson and then there's practicing,
and many people don't practice. How do you deal with that?

Speaker 2 (53:53):
Well, first and foremost, the one thing that's great about
the performance based program is they're going to have two
hours of practice every day week, which on average is
more than the average child practices. So if they're in
the rehearsal and they're playing their songs in the rehearsal
in preparation for the show, they're going to have practical

(54:13):
and and mentored practicing sessions because you're going to have
the show director saying, hey, listen, you know you really
need to hit the fret board here or on the keyboard.
You know you you're you're just naturally doubling the bass.
We don't need you to do that, or try this

(54:33):
finger construction, or watch the form on on your you're
playing a little more of a barado there, stand up straighter,
et cetera. But in addition to that, the only way
to accomplish a breakthrough in that job is to make
it more fun. It is as simple as that is
that We have variations of levels of commitment within our students.

(54:57):
That exists everywhere, but we love where the friction to
practicing so much by making it fun. One is you're
doing accessible music. You're doing music that you're going to
get the reinforcement of. It's not that I don't love
the Pathetique sonata. I do, and I can play it,
and it was fun to work to play it. But

(55:20):
it's not like I'm going to go to my friends
and say, oh, you wouldn't believe I know how to
play the Pathetique sonata. So I think a lot of
it is just the reinforcement of accessible, contemporary popular music,
but a lot of it's actually the functioning of our app.
So our app is game like. So when a kid

(55:41):
is working on either an exercise let's say that pentatonic scale,
or working on the base part to wagon wheel, both circumstances,
in our app, we have this interactive capability where the
app will tell you how you did on pitch rhythm,
It'll give you a grade or a score I should say.

(56:06):
And what that does is create this kind of fun
gamification of practicing. But it's low stakes, it's low risk,
it's not failing. In fact, you don't have to submit
your exercise until you're happy with it, and so kids
will try to perform. And so what we've tried to

(56:28):
do is really gather the best of what we see
in gaming, massive multiplayer gaming, and say how do we
create this energy to make practicing fun by design.

Speaker 1 (56:40):
Then I think the.

Speaker 2 (56:41):
Third piece is listen, you're working towards a show with
other kids. You want to be ready. So I think
there is a little bit of additional motivation that is
much more powerful than tell your teachers or your parents
wagging their fingers.

Speaker 1 (56:57):
At you, Okay, I have my lesson, I go home.
You're saying, it's not like the old days where I'm alone,
that all of my practice is engaged with an app
or something else.

Speaker 2 (57:12):
Yeah, yeah, so our app is your We think of
the app as the sinew between the lesson and the
lesson and the lesson the reversal. It's a place where
you can get all the curriculum, and in fact, we
give every one of our students all twenty five of
our method books in the app. So if they're curious
and they want to try something on base or try

(57:33):
a more advanced skill, knock yourself out. But in addition
to that, they have got not just the exercises that
we have in the method books or the subset of
those that's been assigned to them, but we have thousands
and thousands of exercises that have been uploaded by our
instructors that they can tap into. So their instructor could

(57:56):
tap in, could upload an assignment for them to play,
and then they'll also have the tablature, the sheet music,
the notation, playback metronome, all the functionality to make a
practice session more substantial. It's as if you have a
digital teacher there with you giving you real time feedback

(58:20):
on your proficiency.

Speaker 1 (58:23):
Okay, let's go back to I walk in the front door.
I have some basic skills. Okay, what is the season?
How many shows do you do in a season? And
I either have to sign up for that if it
doesn't appeal to me, I have to wait to the
next season. How does it work?

Speaker 2 (58:42):
Yeah, so, you know, we always remind our schools that
the best time to sign up for School of Rock
is now. That whether you're a month into the season
or two months into the season of a three month
season or three plus month season, there's always the opportunity
to bring a new band member in because we phase

(59:05):
the casting. We release only portions of the curric or
the of the repertoire as the season goes on, so
that we can not overwhelm the kids or the adults,
but also so that we can bring in new people
to the band when those new people are ready and excited.
So you're going to come in and you'll match make

(59:31):
with a given show. And then the very first thing
that will happen is you're cast on songs. You'll be cast.
We want you to play bass or guitar and these
three songs, and I know you've never played bass before,
but you know for you know those four strings, the
first four strings the same thing, and we're going to

(59:51):
teach you bass technique so that you're increasing the likelihood
that you're going to have more playing time later in life.
And then we want you on back ground percussion, background
vocals on these pieces. And that becomes the heart of
your study topic, if you will.

Speaker 1 (01:00:09):
What is the cost in the commitment.

Speaker 2 (01:00:13):
Where it's monthly tuitions, so we don't sign up for
the whole semester, but we want to have continuity to
make sure that there is you know, folks don't drop
in and drop out, so it's a monthly commitment and
the cost depends on the territory, the area in which

(01:00:34):
we're operating with the market. But for our performance program,
typically we're in the high three hundreds, low four hundred
dollars per month. Naturally in Manhattan or Palo Alto, it's
going to be more expensive because our rent is so
much more expensive, our labor costs are so much more expensive.

(01:00:57):
And for that, you'll have a two plus hours each
week and depending on the school, thirty to forty five
minute lesson each week, and then all the access to
other community activities like we do webinars and touring opportunities,

(01:01:18):
which you've probably seen some of our propaganda in terms
of Summerfest and Lolla Baloo's Rock and Real Lisbon, et cetera.
But that's the general economics, pretty simple pricing model.

Speaker 1 (01:01:33):
Okay, And you have my credit card on file and
you're going to build me unless I cancel. Correct, Okay,
So how many shows are there a semester? And how
do you pick what the shows are?

Speaker 2 (01:01:49):
So we have sixty core shows that we have that
are combinations, well, permutations of the twelve hundred songs in
our core curriculum. So we've spent several years kind of
honing what we think are pedagogically appropriate shows, the ones

(01:02:11):
that deliver the most technique and theory quietly to our students,
but have the most diversity too in regards to genre.
So we want metal, we want Prague, we want British Invasion,
we want the twenty tens, you know, which some of
the kids call classic rock, which is jarring, but we

(01:02:33):
also want early blues. So what we do is, then,
depending on the age of the school, the experience of
the school, depending on the nature of the student body
and who they know are enrolling, the music staff will
get together a few months before the next season and say,

(01:02:55):
here's what the roster looks like of our core kids.
Here's what we've done season. Here's some things we really
need to pump up. Here are some things we've heard
demands for. You know, we've got this whole core of
kids who've gotten into my chemical romance. Well, let's scratch
that itch. We can do that. So I think that

(01:03:18):
it's a it's a little bit of an art combined
by tools that have science to them, where we can
actually go through our what we call our method engine
and say, okay, we have these levels of these players,
what shows can best equip or best serve the needs
of those players, and then they announce the shows kids

(01:03:41):
can put their first second choice in. We do not
guarantee you're going to get your first choice. And one
of the best pedagogical outcomes we have had as a
general rule over twenty five years is how many kids,
after they've gotten their third choice, are that becomes their
favorite musician of all time. That's just the nature of youth.

(01:04:03):
So that's how the mechanics of it work. And as
in terms of how many that can be, anywhere from
three to twelve shows. You know, a school like Perth
which has got nearly five hundred students they'll be doing
They may take a whole weekend at a venue and
do twelve end of season shows, whereas a newer school

(01:04:28):
with just one hundred and forty students they may be
doing three shows.

Speaker 1 (01:04:32):
Okay, so it's all signed up. How many songs are
going to be in the show in the genre that
I pick or the era that I pick it? How
much am I going to play on them?

Speaker 2 (01:04:44):
Yeah? So the typically the shows will be a wide
variation kind of eighteen to twenty one tunes, and you
will typically play your core instrument on a handful of
those songs, not most, but then you'll be tasked to

(01:05:06):
play additional instrumentation on the rest of the songs. So
much like in a recital when I was learning piano,
you're the delivered product might be one sonata, one a tude,
and you know, one Bach invention. We want to make

(01:05:27):
sure that there's enough substance that that kid is getting
a handful of challenging songs and getting exposure that they're
part of the band in more secondary ways. So depending
on the number of students, that number will change, and
depending on the nature of the songs, the number changes.
Bohemian Rhapsody has a much higher student count for orchestration

(01:05:51):
than say Green Day, Like you know, Oh Love on
Green Day.

Speaker 1 (01:06:03):
Okay, so I practiced for three months. Tell me about
the actual show.

Speaker 2 (01:06:07):
The shows are epic, So we'll we'll take you know will.
If you're out in la you might see a School
of Rock end of season show at the Troubadour, or
you might see it at the Knitting Factory in Brooklyn.
Reggie's in Chicago, and it is a full rock and

(01:06:29):
roll show, Tier one back line, lights, sound, and the
venues love us because we'll typically go into the venue
at a time when they don't have other activities, and
the food and beverage is terrific for them. So what

(01:06:49):
you'll find is each student will bring their loved ones,
their friends. The ones that bring the most audience members
are our littlest kids. So when you have a seven
year old doing seven Nation Army, they'll have and it's
it's epic, Bob, Honestly, it's the cutest thing you've ever seen,

(01:07:11):
and they'll have fifteen fans in the audience, and of
course that kid sounds like Hendrix as far as every
one of those fans is concerned. But that's the reinforcement
we want to create. We want to create at seven,
you hit your first gig, you played the Troubadour at seven.
That's what we want.

Speaker 1 (01:07:28):
Okay, So is it like, let's just assume your store
has five different tracks they're all going to play together
on one night.

Speaker 2 (01:07:39):
It depends. Sometimes it's absolutely impossible, but typically the season
shows will either happen same weekend or two consecutive weekends.

Speaker 1 (01:07:48):
So let's just say I'm there for a night and
I'm showing up for somebody in the band. How long
is the show and how many bands are going to
be there that night? Is the audience gonna cycle in
it out it's like an eight hour marathon, or it's
like four hours, two bands that's it, or three bands, whatever.

Speaker 2 (01:08:09):
Yeah, I think typically what you'll find in most cases,
they make it a reasonable evening where the the you know,
it'll be a tolerable amount for everyone to stay around
for most of the show, and it's encouraged. It's really
encouraged from a teamwork standpoint to do that. And what

(01:08:30):
we do we have is a really really good habit
as least students stay around for the rest of the shows,
so there's always this core audience in the stage cheering
on every every band. So that might be a four
six hour kind of thing. There are some weekends and

(01:08:51):
some of our busier schools that almost feel more like
a music festival where it's morning till night with maybe
an afternoon break and people are slotted in and you're
kind of you're cast to a certain hour or set
of hours, and that's really just a function of the number,

(01:09:12):
the size of the school, the number of students, the
size of the band as well. We'll sometimes have adults
play in the same show as kids. I personally think
it's sometimes cooler to let the adults kind of do
their own thing. And then we'll also try to get
our littlest kids to play one or two or three songs.

(01:09:37):
And it's absolutely beautiful to watch because no one's more
excited about that. So you got all these little ones
on stage, it's the first time they've ever been on stage,
these super supportive big brothers and big sisters, the big
kids in the band, and who are really showing them
love and affection and attention. And then they go out

(01:09:59):
there and they're you know, they're doing you Shook Me
all night long. It's really fantastic.

Speaker 1 (01:10:05):
Yeah, I can visualize it, and I'm laughing and smiling
at the same time. Obvious question here it is called
the school of rock. If you really want to get deep,
Rock's penetration and consumption actually went up a little bit
in this last period of time, but still consumption is

(01:10:28):
dominated by hip hop. Is it very clear that this
is rock, It's not pop, it's not Mariah Carey, it's
not Jay Z And if you want that, you go
somewhere else. Tell me what's your response.

Speaker 2 (01:10:43):
To that one. As of now, we really only have
one strict genre philosophy, which is that we want an
ensemble based music program. So we over the years have
gotten far more imaginative about what we consider rock. School

(01:11:04):
of rock is a noemonic. It's a little bit like
Amazon used to be a you know, a bookseller, and
that was their original identity and then it became a
mnemonic for the endless isle of everything. We feel that
way about ensemble music. Now there's natural limitations to that.
If we were to do that orchestrally, or do jazz ensembles,

(01:11:25):
or to do chamber orchestras we need have to, we
have to make some more radical changes. But from my perspective,
any genre in the contemporary music canon that is ensemble
based is fair game. And you will see our schools
take advantage of that. And where that becomes very relevant

(01:11:47):
is in our schools outside the US. You know, there's
an amazing as you know, there's an amazing Andian rock
scene like Andyan prog rock, and and we want to
make sure that that comes to life. So you're going
to have all together different orchestrations in Chile and Peru, Paraguay, Colombia, Brazil.

(01:12:16):
You know, you'll have sertanejos songs in samba in Brazil
and we're very comfortable with that both domestically and internationally.
What that actually means in practical terms, though, is our
genre really starts with the early blues and ends kind
of in the twenty tens. But to keep it fresh,

(01:12:39):
we will have even more contemporary music. But we've done
rock rap shows. There's plenty of rap shows with with
you know, full back line, you know, and as you know,
you know, you go to Laala, you watch Childish Gambino,
he's got a full back line. That's not true for everyone,

(01:13:01):
you know, Kendrick Lamar doesn't in his current iteration. But
if he comes out with tunes that have a full
ensemble orchestration, we'll weave that into our curriculum, ready, ready, quick,
because we believe that's appropriate.

Speaker 1 (01:13:18):
But it's a practical matter. Let's just talk to us
where we're familiar with the repertoire. Yeah, what percentage is
essentially rock?

Speaker 2 (01:13:29):
I would say seventy percent of our curriculum today, You
and I would agree it falls within the rock genre,
and then the remainder would be, you know, adjacent genres
that could accidentally be called rock by somebody who isn't
familiar with the nomenclature. So it may be more pop, indie, progue, metal, punk,

(01:13:54):
et cetera. But it's it's still centered. But that is
of all over time.

Speaker 1 (01:14:01):
Okay, so let's go back to the categorizations. You have rookies,
you have little wing, you have adults. How many different
categories do you have?

Speaker 2 (01:14:11):
Well, that plus our performance program is the heart of
what we do. But there's this interesting migration that we're
going through that I think is going to be very
very transformational for the company, which is that we've had
this massive growth and success by being the place to
learn to be proficient musicians through cover music, but with

(01:14:36):
the effective, endless opportunities to self distribute and also the
psychological and the educational benefits of creating for something from scratch.
We're adding additional things beyond those core programs. So we
have now a songwriting program. We do that all season long,

(01:14:56):
or we'll do that during camps. We just introduce used
to recording and production program that we'll be rolling out
system wide. And so I actually see the scope of
our offerings changing pretty dramatically. One I'm excited about is
live sound. I'd like to do a season long live
sound program. I'd like to do a season long business

(01:15:18):
affairs program where you know, we get Bob as a
guest professor, as a culminating a culminating guest, and we
we do the basics to music distribution, et cetera. Self promotion.

(01:15:39):
So I think we're at a point where we've got
a very, very stout and defined set of menu offerings,
but we are changing that because we think that there's
a lot more value to be added. I would also
say that we accidentally have become a pretty important player

(01:15:59):
in remote lessons. When COVID hit. You know, you can
imagine a CEO's experience when they're saying themselves, we're in
the business of throwing together like a dozen or two
dozen kids into a small room, having them breathe and
excel vigorously, and then COVID comes. We had to move

(01:16:26):
to a global remote teaching capability within a week, and
we had that up and running in the second week
of March, which to a large extent, saved the company.
But what's lingered from their is we're doing still doing
thousands of remote lessons a month because instead of COVID,

(01:16:48):
it's tummy aches, or it's vacations, or it's my car
broke down, or there's an it's just more convenient, or
I live in Vietnam and you don't have a school
in Vietnam yet. So I also see coming a really,
really really big commitment to addressing the entire addressable market

(01:17:11):
of music education. And I know there's a lot of
players out there, but the beauty is we've got a
very famous brand and we've got a really really unusual curriculum.
One thing I didn't mention in that regard is that
our teaching methods patented. We actually secured a patent a
couple of years ago, so we actually feel we have

(01:17:33):
a moat around our teaching method that'll let us bring
that to an omni channel world in a bigger way.
But that's the current menu of services, excluding all the
really hair brained stuff that we have in mind.

Speaker 1 (01:17:50):
Okay, there's twelve months in a year. I would assume
that if the performance cycle is three months, there A
are there force Michaels a year? B Do people drop in?
Drop out? Are they dedicated. You know, what does the
student ultimately do?

Speaker 2 (01:18:09):
Yeah, So we typically have four cycles. But in addition
to that, we have this pushed me, pull me during
the summertime. During the summertime, we'll lose students, some students
because they'll be doing other summer activities in the Northeast.
You know, a lot of the kids go to sleep

(01:18:30):
away camp, or we have kids going to the shore
or going on family vacations, college prep, etc. So that's
a headwind. A tailwind we have though, is that we've
have a massive business in camps, day camps, So we'll
do I'm going to just estimate here, but I would

(01:18:54):
guess we'll do over twenty five thousand, maybe thirty thousand
units of camp over the summer, which is an amazing
way for us to actually garner new leads for the
fall season. So the only time that's peculiar for us

(01:19:14):
is where at whatever country in which we're operating, when
folks are on school vacations. Now there's countercyxicality because we
operate our biggest markets in Brazil outside the US, So
there it's the opposite.

Speaker 1 (01:19:27):
Schedule, right. Okay, when you say you run day camps,
that's a nine to five camp.

Speaker 2 (01:19:34):
Typically nine to three, so they'll do and this tends
to be younger students, and it's based on a lot
of the principles that we have in our performance program,
and the only thing that's different is have a slightly
less ambitious show on that Friday. They don't have three
months to prepare, so it may be three songs or

(01:19:56):
five songs. But we'll do Beatles themed camp, Green Day
and pop punk and the nineties, and will also do
songwriting and recording camps. But yes, those are day camps,
typically with some kind of culminating experience on Friday, usually
at the school itself.

Speaker 1 (01:20:17):
Okay, let's write off the summer for the reasons you mentioned.
Let's just assume I'm in during what we'll call the
conventional school year. To what degreeedy kids continue during the
year year after year? To what degree do they drop
out completely come back? What's it like?

Speaker 2 (01:20:36):
Yeah, so we've actually looked at that in a pretty
detailed way, and there's a staggering statistic that we found
is that after forty eight months, seventeen percent of the
students who started forty eight months prior are still with us,
which is an incredibly high retention for child music education actually,

(01:21:00):
given the fact that includes students who graduate out, that
includes students who have moved on to other areas of passion.
So you know, the thing that creates that greater stickiness
is the performance. Because we also looked at the cohort
of students who just take individual lessons from us, and

(01:21:24):
what we found is a very small single digit number
is still with us after forty eight months. And in
a strange way, it's a natural experiment on our source
of differentiation versus traditional music. That's a clue about actually
what's happening in most traditional music is forty eight months later,

(01:21:47):
they've moved on to something else. But in our curriculum,
they stay a meaningful number of stays for a really
really long period of time. And that's part of our
growth is we're getting all these new students as we're
getting better and better and better at retaining students by
having more and more of them in this really differentiated

(01:22:07):
performance program.

Speaker 1 (01:22:08):
Okay, so forget the adults for a second. Who are
the students? You know, when I grew up in the
old era, you did a smortgage board of activities. Today
people tend to specialize. But in addition, conventionally, the people
participating in music and arts, we're not necessarily the same

(01:22:29):
people participating in sports. So who are these kids?

Speaker 2 (01:22:35):
Yeah, I think that you know that most of these
kids are folks who are either in the sampling stage
of discovering whether music is their thing, or in the
conclusion stage of determining it is by trying other things.
So we'll always get browsers, will always get people who

(01:22:55):
are doing both. And I would say the vast majority
of our students are doing something in addition to music
that is different than music. It might be debate, it
might be musical theater, it might be it may be art.
There's a very small overlap between sports and music. But

(01:23:19):
what's interesting about that, what intrigues me about it is
the principles are identical, and so we happen to be
real fans of the fact that there is this assortment
of different child enrichment activities that we can be part of.
We don't lament when a kid migrates out to sports

(01:23:43):
because we think if they're finding their place, that's the
source of their civics lesson, that's the source of their
ability to negotiate compromise the source of their psychological wellness.
That's okay with us. But yeah, I think that we
tend to the vast majority of our students are people

(01:24:03):
on the journey to discover if music is their thing
or they've discovered it. You know, a kid like me
who you know, notionally played varsity tennis, but that was
only because they needed one more kid on tennis. But
I was a music kid. I was the band kid.
We get most of those kids.

Speaker 1 (01:24:29):
Okay, So what do Greedy have a sense of, Miss Spooka.
I mean, do the kids show up on Tuesday for
a lesson, in Friday for rehearsal. Where does this actually
create bonds, especially in this communicative world where kids can
communicate in a DULs community of the device the people
around the world.

Speaker 2 (01:24:48):
All right, well, if you know, if we're gonna if
we're gonna start speaking full on Yiddish, then then that
we're instead. I grew up in a house where my
parents spoke Yiddish. Didn't think I was understanding it. So
you know how much Muschbeche is there in our in
our community. It's a really important part. We We actually

(01:25:08):
never refer to the company as a company or the
brand as a brand. We refer to it as a
community or a family. And it's really important when you're
starting from a point of view that that unit of analysis,
which is the ensemble, the band, is the pre eminent

(01:25:29):
goal is a great performance working together. It is central.
And the stories we hear Bob are they they'd they'd
both uplift you and break your heart. You know, before
everyone asked how we survived COVID, and the answer is

(01:25:52):
that for School of Rock, that wasn't our first pandemic.
We had a we were dealing with a pandemic well,
but before COVID came, which is childhood anxiety, depression, suicidal,
ideation and sadly suicide and far greater mortality in the

(01:26:17):
age range we serve than COVID. And if we didn't
know it before COVID, we know it even more now.
Is that the non musical elements of what we do
are the principal sources of differentiation. That is the highest
value thing we do. I used to work as a
chief marketing officer for CBS Pharmacy for seven and a

(01:26:40):
half years, and having done that, I think of our
business as a therapeutic business. All about adherence and compliance,
which is that the medication of music and the medication
of the experience of you know, just feeling in control
and I'm getting up on stage and I'm important and

(01:27:02):
without the band the song doesn't sound right. And knowing
what an impact we're having on those students is really gratifying.
But the tangible manifestations of it. When you walk into
a school of rock, you will see smiles and eye
contact and disengagement with phones in a way you won't

(01:27:26):
see almost in any other activity. So if more people
understood what mushburrah meant, I would make it part of
our tagline because it really defines as in most cases Yiddish,
it means something, but it means it even more in Yiddish.
School of rock is a mushburrah, It.

Speaker 1 (01:27:46):
Is a family. Let's talk about the adults. Who are
the adults who come? And on the same theme, there's
all this talk about loneliness, especially amongst men, and some
men don't don't have any friends. So who are the
adult participants? Will it be something like I show up

(01:28:08):
or will I end up creating relationships to translate outside
of the program.

Speaker 2 (01:28:13):
We often see the latter, but sometimes it's the former.

Speaker 1 (01:28:18):
You know.

Speaker 2 (01:28:18):
The reality is that because of my travel schedule, I'm
a really bad School of Rock adult band member. So
I'm not a responsible person, responsible member of the band.
I'm hoping my schedule can stabilize to some extent so
that I can be a more active member. So I

(01:28:39):
might not be one that's using it for a social outlet.
But we have a lot of our schools where this
becomes their you know, I think about the Freemasons, you know,
a few centuries ago. There is this need for adult

(01:29:00):
to have communal work, to have socialization, and there's such
so much jarring research about the disassociation at the adult level.
So yes, I think we do serve that purpose, but
not exclusively for some folks. There's people who have their friends,
they have their hobbies, but this is the place for

(01:29:22):
them to get their musical outlet. But those people can
coexist in a band.

Speaker 1 (01:29:28):
Okay. So talk to John Anderson, famous for Yes, he
goes on the road with a School of Rock band.
So we talked all about the education. A is there
anybody who's been through the School of Rock program who
has established a successful career as a professional musician that

(01:29:50):
people might know the name of and what are the
opportunities once you reach that level of proficiency.

Speaker 2 (01:29:57):
Yeah, we're excited that we're now sort of at the
age and stage where those our kids are starting to
break and ad middly, I'm a proud I'll answer your
question sounding like a proud papa. We've got band submerging
bands like Lifeguard and Hippocampus, Horse Girl, The Regrets, Geese.

(01:30:21):
These are all bands that are largely or entirely School
of Rock kids. And then you know, we're finding I
think of the guitarists in Dominic Fike's band that we
have a guitarist from a school of Rock who's in
the Saturday Night Live band. So we're starting to see
this very steady stream of folks who are now aging

(01:30:46):
out of the program and stepping in to the profession.
One of the things that's going to be a big
area for growth for us going forward is, you know,
we see about one hundred plus one thousand, maybe even
one hundred and fifty thousand students in the next twelve
months as part of our program, and over time that's

(01:31:09):
going to build to millions of alumni. And the law
of large numbers suggest that more and more and more
of those kids soon to be adults are going to
be at the centerpiece of the next generation of performing artists.
We're looking to organize that in a much much more

(01:31:30):
methodical way. You know, our offices are in Boston and
Chicago and LA but I live in Nashville, and I
moved to Nashville in part because as an environment for OSMOSIS,
it's a great place for me to start connecting us
in a bigger way to the broader value chain, because

(01:31:51):
we should be the biggest producer of new talent in
the musical field in the world, just because the sheer
scale that we have and will get as we're growing
at such a fast pace. So the answer is, yes,
there are many more I don't even know about because
we've done a perfectly terrible job on alumni relations. But

(01:32:15):
coming over to the next twelve eighteen, twenty four months,
it's going to be a very central part of what
we do is being much more deliberate and much more
disciplined around that supply chain and monetizing it and most importantly,
helping amazing people get out into the space.

Speaker 1 (01:32:37):
Let's be specific. You mentioned School of Rock kids at Lollapalooza.
How many kids do you have at this elite level
and it's like the people going out with Johnny Anderson,
which he testifies about. How many opportunities are there like
that and what do the actually look like.

Speaker 2 (01:32:56):
Yeah, so we have a range of different opportunities that
have a different level of threshold. So I'll give you
three scenarios and the last is specifically what you're asking about.
We have an opportunity each year we're you know Summerfest
of course in Milwaukee. Well, Summerfest is during the daytime

(01:33:20):
but basically becomes School of Rock. So we take over
all the main stages at Summerfest and we'll have eighty
two bands there from all around the world, Peru and Chile,
and those will typically be the house bands from the
individual schools. So think of those as the best players.

(01:33:42):
Think of it like travel basketball. It's the best players
typically of that school. Then we'll have a more selective
program like we had schools having to audition their bands
to get selected to play at Rock and Rio and Lisbon,
and that was say, much more involved, logistics, much more complexity,

(01:34:03):
higher profile, bigger, bigger attendance at some of the venue
et cetera. And then the most selective we have is
our All Stars program. And what we do is audition
hundreds and hundreds of kids who are recommended by the schools.
We zero it down to about one hundred and sixty

(01:34:24):
one hundred and seventy of those kids put them into teams.
We just completed our All Star tours. So the kids
that play at Lalla or at Red Rocks, or you know,
or do our recordings for us, those will be those
all Star levels. And you and I would close our
eyes at those performances and you would say, this is

(01:34:46):
as good a rock and roll performance as you've ever heard,
sometimes better. And what those kids will also do is
do build our collateral. So we've secured sixty or so
sync writes to some of the best songs that are
out there. And so we'll have our all Stars go
into Sunset Studios or go into another Tier one studio

(01:35:14):
and record high production value. So you look at our
rendition of California Dreaming. It's got over ten million organic
views because it's just so damn good. And Lauren Fryhouf,
who was the lead singer on it, ended up being
number two on the Voice so I would say we

(01:35:37):
have hundreds of kids who, if luck and access were right,
would be as competitive in the professional market as anything
that's out there, and that's going to grow to thousands. Now,
of course, the markets mean it's difficult, it's limited, so

(01:35:58):
there's not going to be the opportunity for all of
those kids to become professionals, and not all of them
want to. We have a lot of kids who are
professional level musicians, but they also want to be professional
level doctor. So but it's in the hundreds growing to
the thousands of kids that I think would be signable.

Speaker 1 (01:36:20):
Why you why do you run the house a school
of rock?

Speaker 2 (01:36:25):
Well, you know, I'm a musician from early childhood, maybe
more importantly, you know, for me, music was my therapeutic outlet.
So you know, I wasn't that athletic kid. I wasn't
the tall kid, wasn't the richest kid, and notwithstanding my charm,

(01:36:52):
I wasn't the most charming kid. And what I found
with music is that the embrace and the support structure
and the the the the opportunity to make friends without
even speaking a word was so powerful that it always

(01:37:14):
was in the back of my head, how can I
play a bigger role. But then I had a very
conventional career, you know, consulting, getting an MBA, going into retail,
going going into other franchising environment and then, you know,
maybe the most important factor was for me was in

(01:37:36):
the role. Immediately before this role, I worked for another
very large franchise company called Edible Arrangements. So if you
ever have questions on how to cut pineapple just right
and make bouquets out of fruit, I am your guy.
But while I was in that role, my brother got

(01:37:58):
very ill with pancreatic cancer. And as I think everyone
listening can identify, you have those moments where you say,
what am I on this planet to do? What am
I here to do? What matters to me? What will
give me joy? And it's almost as if the universe

(01:38:21):
was answering the question back. I got a call from
School of Rock. They said, okay, well you've got a
background in marketing and branding and organizational transformation and CRM
and all in these franchise skills. You seem like a
good guy to talk to. They had no idea that
music was my most important thing. We even had a

(01:38:42):
family band with my kids, and my poor wife was
conscripted as the bass player, and I so regret not
finding my purpose earlier. Although none of the stops along
the way, I wouldn't be in the role without the
stops along the way. But that's why I'm running School

(01:39:05):
of Rock. I feel like fate has dealt me the
kindest hand by giving me this at a time in
my life when I can appreciate it. It's incredibly fulfilling.

Speaker 1 (01:39:19):
Okay, so what are the challenges you presently face in
the business and what are the goals. We've covered some
of the goals, but what are the challenges.

Speaker 2 (01:39:30):
I think the biggest challenge of an organization that's so
purpose driven, that's so anchored in creativity and community, is
preservation of the culture. You know, we're growing so fast
in so many places in there. You know, We've got

(01:39:51):
you know, Australia and Taiwan, Philippines, South Africa, And on
the one hand, when I visit these locations, it feels
like I'm an old friend. But on the other hand,
I'm mindful that as you increase your scale, increase your scope,
how do you preserve that delicate balance of not just

(01:40:14):
doing this for the money, but also not doing it
for the money, making sure that there's a sufficient profit
motive to drive growth and reinvestment. And you know, I
think that every CEO if that's not their number one thing,
if they're a growth company, then they're kidding themselves. So

(01:40:36):
we do a lot of work on succession planning. We
do an enormous amount of work on culture building values,
you know, really conveying the why of what we do.
But that's what keeps me sleepless is at what point
does it start feeling as if we're losing something in

(01:40:58):
the translation. We have hit that point yet, I'm not
worried about it in the next six months or eighteen months.
But as we grow from being three hundred and forty
schools to being fifteen hundred or two thousand, we have
to work hardest at that because if we lose it
at the corporate level, we'll lose it in the rehearsal room.

Speaker 1 (01:41:19):
Okay, and relatively quickly. Because most people are confused, explain
what the School of Rock is relative to the movie,
the musical, and other operations that have used a similar moniker.

Speaker 2 (01:41:37):
Yeah, so School of Rock predated the movie and by
definition predated the musical, and it was a relatively small
organization at that time when the movie came out, and
soon after that great movie came out, School of Rock
was acquired by private equity. Management was professionalized, it was infrastructure.

(01:42:01):
There were more lawyers about and financed people about. And
the question came up, which is, this is a little
bit of a strange situation, which is we pre existed
this amazing movie. And it was right about the time
when the movie was being over, the brand was being

(01:42:22):
licensed to Andrew Lloyd Webber for the musical which came
several years later, and it was at that time we
reached a really really constructive coexistence agreement with the good
people of Paramount that effectively organizes the where we can

(01:42:42):
operate and where the movie can operate. And for us
it's terrific because we're going to be in the business
of children's music education. We can do reality TV shows,
we can do tours of School of Rock musicians under
the School of Rock name. We have our own logo types,
our own identities, we have massive land banking all around

(01:43:04):
the world in terms of domains and trade dress, and
really the only thing we can't do is make comedy
movies or do fictional Broadway shows, and thankfully we're very
friendly with both parties. We're big fans of really useful
group because they're doing such a great job of sustaining

(01:43:28):
the brand the stage show, which we think is really special.
So the way to think about it is just we're cousins,
but we don't really operate in any direct way, and
we really didn't grow out of one another as as

(01:43:49):
specifically as one might thought might think most people think
we came after the movie, but we did not.

Speaker 1 (01:43:55):
And any plans to go public.

Speaker 2 (01:44:00):
Boy, you know, that's one of those are you running
for president questions, which is I can say for sure
that there are no plans afoot to go public at
this time. I think that frankly, we're a small business,
a relatively small business. We've got really favorable economics, so

(01:44:25):
we can self fund to a large extent, and so
while I don't see going public in the future, I
definitely see that there are lots of transformational ways that
we could work with partners and kind of build on
what we do and do it in a bigger way.
Because if you really think what business we're in, it

(01:44:46):
would be myopic to say we're in the music education business.
We've talked about, well beyond that, we're in this the
talent production business, but we haven't fully capitalized upon it.
But more broadly, we're in the child enrichment business. So
is there a way for us to integrate in a

(01:45:07):
bigger environment with other related areas, more tangential areas, and
take all the things we know about child enrichment and
blow that out. I'm excited about that, but I don't
see us going public in the near term. I don't
We really don't need to do that for investment, and

(01:45:30):
I'm not sure that right now would help our That
number one MORI I have, which is cultural, is that
I really think our Armish book is going to be
better off all around the dinner, the dinner table, enjoying
one another's company. And notwithstanding the fact I know a
lot of people who are on Wall Street, I'm not

(01:45:52):
sure they need to be at the table for this
particular dinner at this particular time.

Speaker 1 (01:45:58):
Well, Rob, I want to thank you for taking the
time to speak to me and my audience. I have people,
whether it be parents or an adult close friend, they
can't stop talking about the School of Rock. You know,
most people say, oh, yeah, my kid's in competitive swimming
woods they go on, I got one, Frienci, Well, this
is what we're doing this term. You know, these are

(01:46:20):
the solos I'm playing, These are the songs, and I'll
discuss whatever. And it probably is that your students are
your best marketing device.

Speaker 2 (01:46:30):
They are, and you know, it just comes down to
this principles. Somebody asked me the other day, is like,
how in one sentence can you define what's special about this?
And I always say, you know, what's more fun than
seeing Mick Jagger is being And when we can hear

(01:46:51):
those raves from the kids and those parents, that's a
great joy. And I'm so glad to hear that, and
I'm so pleased that you gave me the opportunity to
talk about it with you today.

Speaker 1 (01:47:02):
Thank you, Rob. Till next time. This is Bob left
sticks sh