Tutu School founder Genevieve Weeks said yes to franchising her dance studio six years ago—and now there are 34 locations. Here’s how this growth strategy works.
When Genevieve Weeks opened her children’s dance studio, Tutu School, in San Francisco in 2008, she quickly figured out that she’d hit on something good. “By 2009, I’d opened a second location, and that one also did quite well,” says Weeks. “I realized that there could be multiple locations—that this studio could thrive in a lot of communities.” At the same time, she says, the reality of opening more locations was sinking in: “It’d be double the payroll, double the rent,” she remembers thinking.
That’s when she started thinking about franchising Tutu School. Though she briefly considered licensing her business instead—that is, still selling her name, brand, logo, curriculum and training tools, but with less legalese and for a smaller profit—she knew she wanted more control over what other people did with her brand and curriculum. “I knew that if I was going to have to trust other people with my business,” she says, “I needed a say in how it would be done.” That’s why the franchisor business model made sense for Weeks. As the franchisor, she owns the trademark and operating system for Tutu School. Franchisees who purchase the business agree to run it according to the rules and boundaries Weeks set up—in exchange for taking on a ready-made, successful business model.
Weeks sold her first franchise in 2013. Today, there are 34 locations of Tutu School, with nine more reserved for development by current owners. With that kind of experience, Weeks has a clear idea of what needs to happen for a successful franchise model.
Do your due diligence.
If you’re considering this route to growing your business, FranChoice franchise consultant Tana Hutchinson recommends starting with a visit to the International Franchise Association website. “You can learn everything about franchising, current news and events, what the legal issues of franchising are,” she says.
It’s also important to question whether you even want to become a franchise or not, says Hutchinson: “Do you have everything in place to even begin this process?” To determine whether franchising makes sense for you, on both a business and personal level, Bibby Group founder Nick Bibby recommends undertaking a feasibility study with the help of a franchise consultant. “A feasibility study is the best way for business owners to understand themselves in the role of the franchisor before going forward,” he says. “Franchising is a highly demanding and competitive industry. Franchisors must be excellent teachers, mentors, nurturers—open to and capable of caring for franchisees.”
Another part of your due diligence should be determining if you have a proven operating model. “You can’t define ‘proven operating model’ only by a certain margin of profitability,” Hutchinson says, “You do need to show you have a business with positive cash flow.”
Make sure your processes are in place.
What a franchisee is paying you for is not just a trademark or branding, but a complete business system. “So much of the work is looking at the studio itself and asking, ‘What does somebody else need to be able to open this?’” says Weeks. “We were looking at our curriculum and how we would train not just other studio owners but then give them the tools to be able to train their own teachers consistently.”
For some, hiring a franchise development team to help transform your business into a successful franchise may make the most sense. “We were able to bootstrap it,” says Weeks, though she does describe the process as time-consuming. “My team and I would say, ‘OK, let’s work on this project’—but then it would lead to 10 more,” she says. “We had to figure out logistical things like, ‘How does our proprietary software break out for an individual owner? How do we set up websites for each school?’ We realized that not only do you need marketing collateral—consistent branding even down to the postcards—but you need a consistent style guide for everything that’s branded.”
Hire a franchise attorney.
“The Federal Trade Commission regulates the franchise industry,” explains Hutchinson. “So you’ll need a franchise attorney to help you navigate that.” Weeks actually thinks finding a good franchise lawyer is the most important part of franchising your business. “It’s a very specialized area of law, with lots of rules and restrictions, so you can’t get through by reading Franchising for Dummies,” she says.
Decide what you’ll offer your franchisees.
Weeks’ franchisees are responsible for the build-out of the business and operational expenses, like rent, payroll and insurance. Weeks’ franchise disclosure document estimates that franchisees will need to invest $75,700 to $137,200 (including the $36,000 initial franchise fee). In the franchise package, franchisees receive licensing and access to the brand and logo and curriculum. “They also get a huge library of content for marketing and outreach materials, guidance and training, curriculum training and tools for training their teachers,” she says.
Weeks launched an online studio-management system, Twirl, last year, to support her franchisees. It serves as a document depository—a place to post content she wants every franchisee to have access to. “We take care of their music licensing, their website, a ballet story curriculum,” she says. “We don’t have additional fees—they only pay the monthly royalty, going forward.” (Tutu School charges franchisees a monthly royalty fee of 6 percent of gross revenues.)
She also offers her franchisees what she calls “a ton of ongoing support,” like weekly social-media content that they can use with their clients and recital choreography. “It’s become really important to me to maintain this level of constantly evolving content and support,” says Weeks.
Find the (first) franchisee who’s right for your business.
“It was a lot harder than I imagined to find the perfect first franchisee,” Weeks says. “There were people we really loved who got cold feet, and there were a couple people who were ready to jump but who didn’t feel like the right fit for us.” Her eventual first franchisee found Tutu School through a Facebook ad. (Her second franchisee walked by the original studio.) Waiting to find the right match paid off: “Our first franchise owner now has seven Tutu Schools, and the enrollment for some of those has surpassed my San Francisco location,” says Weeks.
Initially, Weeks relied on a franchisee application from her lawyer with a set of questions to ask potential franchisees. “It’s definitely important to know why they want to do this in the first place and where the capital they’d invest would come from,” she says. “For some franchises, this means they elect to get a loan or line of credit. Others use savings or investment from families. Really, we just want a clear understanding of the runway they’ll be able to give their business to launch, and what pressures they might be putting on their personal financial situation to start this business.”
Now, with six years of franchisor experience under her belt, Weeks has a better handle on what to look for. “I really think one of the things we’re looking for most is an entrepreneurial spirit,” she says. “We want people who can probably open a studio on their own, but who really believe in our mission and purpose and know it will be exponentially better to do it with us than on their own.”
Have a franchisor community you can consult for advice.
“I was really lucky in that one of my best friends had franchised the company Bella Bridesmaids to some 40 locations first and then sold it,” says Weeks. “She was an invaluable mentor. If I hadn’t watched her franchise her business, the idea wouldn’t have occurred to me so early.” Slowly, Weeks built a community of fellow franchisors she could depend on for advice and support. “These franchise buddies are in similar situations, with more stages of growth still to go,” she says. “We’ll have calls every couple of months and talk about how to handle specific situations.”
The Bottom Line
Know that it isn’t over once you’ve sold your first franchise. “I did kind of think, ‘We’re going to create these materials, and that’ll be it,’” says Weeks. “But for anyone who thinks it’s going to be a passive-income situation, where you do this work once, that’s definitely not the case. I visit every location once a year, plus there’s a lot of ongoing support. It might be something as simple as adding new features in our software or updating curriculum.”
Yearly site visits offer Weeks the chance to make sure everything at a location is running smoothly and that the studio feels on-brand with her original philosophy. “It’s everything from walking in and seeing how the studio is set up, to seeing if the staff greets families the way we want, to talking about the winter recital,” she says. The main point of these visits, though, is to observe the teachers. “It’s a way for us to make sure the quality of the classes remains high,” she says.
Rachel Rizzuto writes the Business column for Dance Teacher and is a second-year MFA student at University of Illinois at Urbana-Champaign.