How the Tutu School is dealing with COVID-19—and helping its franchisees do the same.
As the founder of Tutu School, a dance studio business with a successful franchise model that has grown to 37 locations throughout the United States, Genevieve Weeks was in a unique position for a studio owner at the start of COVID-19. Not only did she have to make sure her own, original Tutu School locations weathered the virus’ storm, she also felt a duty to guide her franchisees through the tumult. Though she admits it was a particularly grueling experience for her at the start—her husband at one point was bringing all of her meals to her at her laptop, so she could continue working without pause—the appreciation she’s felt from her franchisees is palpable. “What I’ve heard from the Tutu School owners is that they’re grateful to be part of a franchise system right now,” says Weeks.
So how does a franchise survive something like COVID-19? Here’s what got Weeks—and her franchisees—through the first few months of the pandemic.
Cash reserves. “Something that we preach at Tutu School to our owners is to always give yourself a runway,” says Weeks, so that you have time to take the actions you need to. “We did have losses, but we also had cash on hand, and most of our owners did, too.” Typically, it’s recommended that businesses have cash reserves to cover six months of operational expenses in emergency situations like this. “It can be tricky for most small businesses to manage that,” says Weeks. “I recommend three months of rent and at least enough for a modified or streamlined payroll.”
Staying flexible—and creative. Weeks and her franchisees rolled out some additional features to keep their current Tutu School families incentivized. “We wanted to let them know how grateful we were that they stayed,” she says, “but we’re not asking for donations. We’re not a charity—we’re a business.”
For starters, Weeks continued to stream classes through what would’ve ordinarily been Tutu School’s spring break—a week that most studios use to regroup and organize online content. “We knew the kids were stuck at home, too,” she says. Then, realizing that many people were quickly experiencing online-class burnout—and that online classes for toddlers posed a special challenge—Weeks began offering shorter-format classes for her youngest students. “We tried to get creative and provide more variation in actual programming, offering on-demand classes to spice things up and shorter classes for toddlers especially,” says Weeks. She’s also considering offering summer camps online, depending on what stage of reopening each franchisee’s state will be in by then.
At first, one of the usual business benefits of Tutu School’s monthly membership system became a COVID-19 disadvantage. “A monthly membership model is a revolving door—a 3-year-old might stop dance classes to do three months of soccer, but they’ll be back when soccer is over,” says Weeks. “Our cancellation rates were not that much higher than they ordinarily would be,” she says, but she and her franchisees struggled to bring in new monthly students at the rate they’d been able to before, pre-COVID-19. She mitigated that dip in new enrollees by offering new students the chance to stream and pay for classes on a weekly membership basis. “It felt more flexible,” says Weeks, “and we’ve had a fair amount of success.”
Acting on foresight. “One advantage of having so many locations all over the U.S.—Seattle, the Bay Area, one opening in New York—was that we knew it was coming, maybe before other people in the country fully realized it,” says Weeks. Even before any Tutu School locations were under stay-at-home orders, Weeks and her franchisees began streaming classes online, alongside in-person classes. “We streamed ongoing classes for people who didn’t feel comfortable coming in to the studio,” she says. “We set it up through Nest cameras, originally.”
Continuity of service. “Our strategy from the beginning of this has been to fully pivot to streaming overnight—to stay as stable as possible and have it feel as seamless as possible,” says Weeks. “We knew that continuity was going to be really important.” Though a seamless transition to online classes was a business-minded one, Weeks also calls it a “philosophical” one. “In this time of upheaval for our students, we wanted to mitigate that disruption by providing as much continuity and possibility for connection as we could,” she says. Weeks chose to use the online platform Whereby, as opposed to Zoom, because it offered more opportunities for branding, making online classes “feel more like a Tutu School experience,” she says.
Seamless business continuity came with a personal price for Weeks, however. “I didn’t leave my computer for a few days, and my creative administration coordinator didn’t leave hers, either,” she says. “We were churning out guides for our franchisees—how to get set up streaming; how to set up and brand your account; here’s the messaging for families; here are class guides for teachers for how to adapt material into an online class.”
New perks for customer loyalty. To reward customers who didn’t unenroll when classes went online, Weeks offered two perks. Families could stream additional classes at no extra charge, and, once stay-at-home is over, they could make up any online classes in person, with no expiration date. This means students can make up classes even after they’re no longer enrolled. And while she’d created the plan as an incentive to retain a student, Weeks also saw it could be a way to bring a former student back: Say an ex-student comes in to take a makeup class in October. Maybe that student will remember how much fun Tutu School classes are and re-enroll.
Government aid. Weeks and her franchisees applied for and received funds from the federal government’s Paycheck Protection Program, which offered a forgivable loan to business owners, provided they did not remove employees from payroll. “I know there’s been some discussion about whether PPP has really been the Band-Aid that businesses need,” says Weeks, “but for us, it allowed us to keep teachers employed, keep our schedule going and not cut hours or downsize, even though we knew we’d have less revenue.”
Necessary in-franchise relief. A portion of the monthly fee that Weeks’ franchisees pay goes into a fund that pays for products and services that benefit the entire Tutu School franchise system—graphic-design templates, for example, or social-media work. “I decided not to collect anything for that fund—I would cover that. We actually reduced the royalties we were collecting, to make it easier for franchisees to get to the other side,” she says.
Rachel Rizzuto reports on studio business for Dance Teacher and is a third-year MFA student at the University of Illinois at Urbana-Champaign.