Rob Price

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 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 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.

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, 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.

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 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 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.

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 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

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 meaningful reduction over time.

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 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 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 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 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.

to life is in venues. So we'll always look at 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 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 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.

unit economics and the customer satisfaction are super high. So 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 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 of the different models, which may be a little different than some other franchise systems.

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 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 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 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 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.

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, 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 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

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 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.

they'll get that into wholesale pricing. Will help coordinate the shipment, they'll get a couple of palettes in largely from the 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

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 are a conduit for really really competitively priced gear. We see that as a meaningful growth opportunity for us going forward.

there's a zero sum game for the initial buyer. But 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, 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 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

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

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 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 great for society. So in the grand scheme of things, I'm okay with that.

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

In terms of gear, naturally there'll be things like soundproofing, 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 of rock in terms of construction in some markets, that can be up to one twenty one thirty.

and we're very very much in favor of that. So our our way in by our little or we call 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 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 when we do, we can get it with great haste.

model of music instruction. We want happier kids who stay 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 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 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

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 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 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.

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

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. 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, 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, but we're not dependent on that cohort as a source of labor for us.

instructor or one of our administrative team members. But that 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 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 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 other musicians and other really purpose driven team members.

to raised floors. But we have in our design guidelines 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, 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 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.

the local activities like art box and farmers' markets. Get to know businesses that are going to be adjacent to you, 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 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, 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 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. 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.

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 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, 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. 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 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 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.

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 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 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 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 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

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 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 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, 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.

up for a show. So part of the choice for 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 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 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 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 I really think that starts at lesson number two. Lesson number one is just getting to know you session.

to know at least the basics of music theory. And so I you know, I'm very passionate about this as 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 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 exercises in our app and they all build to musical literacy, musical proficiency, technique, music theory.

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, 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 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. 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.

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 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 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. 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 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 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. 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 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.

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 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 on your proficiency.

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 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 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.

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.

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, 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.

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 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, 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 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 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. 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 with just one hundred and forty students they may be doing three shows.

and you know, one Bach invention. We want to make 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 than say Green Day, Like you know, Oh Love on Green Day.

the food and beverage is terrific for them. So what 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, 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.

six hour kind of thing. There are some weekends and 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, 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. 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 there and they're you know, they're doing you Shook Me all night long. It's really fantastic.

If we were to do that orchestrally, or do jazz ensembles, 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 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. 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, 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, 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.

We're adding additional things beyond those core programs. So we have now a songwriting program. We do that all season long, 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 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. 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

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 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, 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

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 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.

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 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 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.

songwriting and recording camps. But yes, those are day camps, typically with some kind of culminating experience on Friday, usually at the school itself.

is the performance. Because we also looked at the cohort of students who just take individual lessons from us, and 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,

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 performance program.

There's a very small overlap between sports and music. But 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 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 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.

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 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 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 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 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

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

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.

a few centuries ago. There is this need for adult 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 them to get their musical outlet. But those people can coexist in a band.

the Saturday Night Live band. So we're starting to see this very steady stream of folks who are now aging 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

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

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 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 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.

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. 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, 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 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 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 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 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 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.

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 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 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 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 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 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.

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 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

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 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.

this amazing movie. And it was right about the time when the movie was being over, the brand was being 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 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 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 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 specifically as one might thought might think most people think we came after the movie, but we did not.

a relatively small business. We've got really favorable economics, so 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 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 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 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 sure they need to be at the table for this particular dinner at this particular time.

discuss whatever. And it probably is that your students are your best marketing device.