Buying a dance-studio franchise can give you a jump-start. A former dancer who owns three Tutu School franchises and a franchise consultant share their advice.
Though Brooke Taylor grew up dancing, she never felt compelled to open her own studio. But when a mutual friend put her in touch with Genevieve Weeks, founder of the successful Tutu School franchise in California, now with 34 locations, Taylor soon found herself considering the franchisee route to becoming a studio owner. “I loved what Genevieve had put together,” she says. “Tutu School had all the key components ready to go—I saw it, firsthand, when visiting her schools.” Taylor purchased her first Tutu School franchise in 2014, in Laguna Niguel, CA. Today, she owns three locations and has tentative plans to open two more in the future, so she has a firm handle on what to consider if you’re thinking of taking this entry point into business ownership.
DO ask to see the studio’s franchise disclosure document early on.
The Federal Trade Commission requires franchisors to give all serious potential franchisees a franchise disclosure document before they sign a contract. “I recommend that you get that document as soon as possible,” says Tana Hutchinson, a franchise consultant with FranChoice. Most franchisors will want to have a phone call or two with you before they provide that document, according to Hutchinson. “But if they delay and delay before they give you that document, that’s a major red flag,” she says.
From the beginning, Taylor was reassured by Weeks’ thorough communication of all salient information about the Tutu School franchise. “When I said I was interested, Genevieve gave me the franchise agreement, which laid out all the parts of owning this specific franchise, including the cost,” says Taylor. “She was upfront about everything.” The franchise agreement clearly stipulated what kind of training and support she’d receive as a franchisee and how much capital she’d have to raise.
DO make sure you speak to other franchisees of the business.
“If a franchisor isn’t willing to let a candidate talk to other franchisees, that’s another red flag,” says Hutchinson. Taylor spoke to other Tutu School franchisees and visited some of the company- and franchise-owned schools, too.
DON’T sign on to a franchise if it doesn’t feel like a good fit.
“Becoming a franchisee is like entering into a marriage,” says Hutchinson. “Most franchise terms are between 5 and 20 years.” You wouldn’t want to enter into a marriage that’s doomed to fail, would you? For Taylor, the Tutu School franchise clicked right away. “I really believed in the model and in Genevieve—everything she was doing just made sense,” says Taylor.
DO be ready to follow systems.
When you purchase a franchise,“you’re buying best practices and proven systems,” Hutchinson says. “If you find that in a business, then you’ve got a leg up on everybody else trying to start a business on their own from scratch.”
DON’T think your business will be on autopilot.
You may be purchasing a proven operating model, with clear directions and support to guarantee your success, but you’re still opening a business. “The one thing I didn’t think about is that when you own your own business, it’s basically 24/7,” says Taylor. “It’s not like other jobs, where you might go home at 5 o’clock and not have to think about it until the next day. I come home at night and jump on e-mails. I’m always thinking about ways to improve.”
DO make sure your finances are in order.
“We pay royalties of six percent [of gross revenues] to the franchise monthly,” explains Taylor. “That feels fair, based on what we get in return—the branding, the website, advertising, training hours.” You’ll also need to pony up a significant amount for the initial franchise fee and other startup costs. For Tutu School, for example, the total investment necessary to begin operations is between $75,700 and $137,200—which includes a $36,000 franchise fee. Taylor took out a loan to open her first Tutu School location.
DO put yourself out there in your community.
When Taylor purchased her first Tutu School franchise, she was 25. She didn’t yet have any friends with kids, and she knew very few people in the Laguna Niguel area. “I had to get out there and meet other business owners and try to get in front of families during community events,” she says. She became involved with the local Chamber of Commerce, and she walked the streets during the annual Laguna Niguel holiday parade, handing out flyers. “I already had in mind that the next year, we’d do that parade,” she says. “And we’ve been in it every year since.”
DON’T think you’re alone.
“You’re part of a community,” says Hutchinson. “You’re learning not just from your franchisor partner but also your fellow franchisees, whether they’re in your marketplace or across the country. You might have conventions or regional trainings. You’re not on an island.”
“The support of both the franchise and the other franchisees is so incredible—they’re open to jump on phone calls and schedule meetings with me,” says Taylor. “They understand the problems and can offer support, and they celebrate with you when you have your wins.” It’s that support in particular that Taylor really depends on, particularly when it comes to legal issues. “Because all of the franchises are in California, I can ask them who they use for insurance and how much they pay for it, for example,” she says. “Or I can say, ‘I got this e-mail from the state of California—did you get it, too, and what does it mean?’”
Rachel Rizzuto writes the Business column for Dance Teacher and is a second-year MFA student at the University of Illinois at Urbana-Champaign.