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How Much Money Can I Make?

Bach to Rock attracts franchisees who want to build multiple units

music education franchises have strong revenue streamsAlan Goodstadt and Glenn Fleischman are both passionate amateur musicians who wanted to find a way to get more music into their lives. Alan was an investment banker for 20 years; Glenn was a successful technology executive.

The two entrepreneurs recognized the investment potential in Bach to Rock and became our company’s first franchisees. They built a school in Port Washington, NY, a community on Long Island, and opened a second school in the 3rd quarter of 2014, 18 months ahead of their development schedule.

Music education franchises: multiple revenue streams

The average student at Bach to Rock takes 70 weeks of music instruction, but those aren’t necessarily consecutive. Many children take summers off, for instance, to vacation with their families. Bach to Rock has created multiple streams of revenue to maximize earnings potential for our franchisees. Here are some of the ways our schools make money:

Private lessons. Before students get into ensembles, they typically sign up for some one-on-one instruction.

Band lessons. The most appealing part of the Bach to Rock instruction method is also a moneymaker, since many parents are eager to sign up their kids for an opportunity to perform with a band in public.

Summer camps. This is how it all began for Bach to Rock, and limited-engagement summer sessions are a very popular way to introduce kids to everything our schools have to offer.

Parties and corporate events. Bach to Rock events are popular with all ages — from first-graders to 50-year-olds. They are customized for birthdays, anniversaries, corporate team-building events and more. One of our most requested events, the Karaoke Birthday Party, brings partiers of all ages into our recording studio.

Recording studio. Local bands take advantage of our full-scale 16-channel recording studio, where students also record their music. Bands often come in the mornings (before Bach to Rock classes are underway) and after lessons are over in the evenings.

recording studios in our music education franchises

Whether you’re interested in building your own mini-chain of Bach to Rock franchises or want to invest in a single school, this could be the perfect opportunity for you. Our company has been recognized among the Franchise Gator Top 100 franchises for 2015 and was included in “Entrepreneur” magazine’s Ten Franchises to Watch in 2015.

Consider the breakdown below from Item 19 of our Franchise Disclosure Document. Please note: Charts 1 and 2 contain affiliate-owned and franchise data.

Chart 1: Net Sales 2015 – Corporate and Franchised Schools Opened 12+ Months*

 2015 System Total2015 System Average2015 System Average2015 System Average      
Open 12+ MonthsOpen 12+ MonthsOpen 24+ MonthsOpen 36+ Months
Private Lessons$4,250,034$425,003$465,658$498,274
4 of 104 of 84 of 7
Band, Group, Early Childhood$1,533,183$153,318$167,196$179,944
5 of 105 of 83 of 7
Camps$580,407$58,041$66,352$73,499
3 of 102 of 82 of 7
Parties$221,885$22,189$19,532$21,398
5 of 104 of 84 of 7
DJ $166,506$55,502$55,502$55,502
1 of 31 of 31 of 3
Other: Retail, Studio, Satellite$208,719$20,872$23,292$24,619
4 of 103 of 83 of 7
Less: Discounts($432,052)($43,205)($42,592)($45,398)
5 of 104 of 84 of 7
Less: Cost of Goods Sold($64,246)($6,425)($6,872)($7,097)
4 of 104 of 83 of 7
Net Sales$6,464,436$646,444$713,380$769,026
5 of 104 of 84 of 7
Direct Instructional Costs$1,760,077$176,008$192,516$204,363
4 of 104 of 84 of 7
Direct Margin %73%73%73%73%
Salary/Benefits/Taxes$1,237,137$123,714$132,790$146,817
4 of 103 of 82 of 7
Credit Card/Bank Fees$150,709$15,071$16,232$17,358
4 of 104 of 84 of 7
Telephone/ISP/Utilities$119,954$11,995$13,066$13,880
5 of 104 of 84 of 7
Bad Debt Expense$22,692$2,269$2,826$3,229
4 of 104 of 84 of 7
Copyright/Harmony Fees$65,600$6,560$6,751$6,949
4 of 104 of 84 of 7
Minor Equip Purchase/Repair$40,918$4,092$4,452$4,460
6 of 103 of 83 of 7
Property Tax/Other Tax$21,090$2,109$2,486$2,618
4 of 104 of 84 of 7
Insurance$55,978$5,598$5,026$5,295
2 of 101 of 81 of 7
Office Supplies$28,669$2,867$2,774$2,949
5 of 103 of 83 of 7
Other$61,520$6,152$4,981$5,194
4 of 103 of 83 of 7
Total Site G&A$1,804,267$180,427$191,383$208,748
3 of 103 of 82 of 7
G&A as a % of Revenue28%28%27%27%
Total Marketing$440,721$44,072$47,429$50,941
4 of 104 of 83 of 7
EBITDA Before Rent$2,459,371$245,937$282,053$304,975
5 of 104 of 84 of 7
EBITDA Before Rent %38%38%40%40%

The chart above presents the Net Sales, less direct instructional costs, site general and administrative expenses, and marketing, achieved by our affiliate-owned and franchise schools open 12+ months during the 2015 calendar year. “EBITDA before Rent” is not gross profit or net profit. There are many other costs and expenses that must be deducted from EBITDA before Rent to determine gross profit or net profit. Please see Item 19 of our April 14, 2016 FDD for further details.
CHART 2Average Net Monthly Sales (Affiliate-Owned and Franchised Schools)*
Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12Total
Average Net Sales$5,395$14,941$17,395$22,872$26,507$27,198$29,857$28,845$32,907$35,600$33,864$33,641$309,022
Number of Schools Reporting999888888888
Schools Attaining Average and %2 / 22%4 / 44%5 / 56%4 / 50%4 / 50%5 / 63%5 / 63%4 / 50%4 / 50%5 / 63%3 / 38%5 / 63%
Month 13Month 14Month 15Month 16Month 17Month 18Month 19Month 20Month 21Month 22Month 23Month 24Total
Average Net Sales$39,099$39,848$39,634$40,206$39,710$37,399$39,669$39,692$45,223$46,449$43,855$41,564$492,348
Number of Schools Reporting888877766666
Schools Attaining Average and %3 / 38%4 / 50%3 / 38%5 / 63%4 / 57%3 / 43%4 /57%5 / 83%4 / 67%3 / 50%3 / 50%4 / 67%
Month 25Month 26Month 27Month 28Month 29Month 30Month 31Month 32Month 33Month 34Month 35Month 36Total
Average Net Sales$41,044$46,061$48,925$44,708$47,268$45,457$47,063$44,997$52,333$57,141$56,543$63,877$595,415
Number of Schools Reporting666666555555
Schools Attaining Average and %3 / 50%3 / 50%2 / 33%2 / 33%3 / 50%3 / 50%2 / 40%2 / 40%3 / 60%2 / 40%2 / 40%2 / 40%
Month 37Month 38Month 39Month 40Month 41Month 42Month 43Month 44Month 45Month 46Month 47Month 48Total
Average Net Sales$53,649$57,659$51,165$47,292$56,557$48,626$54,262$52,814$57,760$60,407$59,028$63,241$662,460
Number of Schools Reporting444444444444
Schools Attaining Average and %1 / 25%1 / 25%2 / 50%1 / 25%2 / 50%2 / 50%2 / 50%2 / 50%2 / 50%2 / 50%2 / 50%1/25%

Presented above are average, monthly, Net Sales data for the affiliate-owned and franchised schools that were open and operating as of December 31, 2015 during each of their first 60 months of operations (or for fewer than 48 months, if they have been open fewer than 48 months). Please see Item 19 of our April 14, 2016 FDD for further details.

Disclaimer:
* Additional details on these figures are included in the Franchise Disclosure Document (FDD).

1. This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. An offer is made only by Franchise Disclosure Document (FDD). Currently, the following states regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If you are a resident of one of these states or a country whose laws regulate the offer and sale of franchises, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your jurisdiction.

2. Actual results vary from franchisee to franchisee and we cannot estimate or predict the results that you may experience as a franchisee.  Your individual financial results are likely to differ from the results shown in the charts. Your results will be affected by factors such as prevailing economic or market area conditions, demographics, geographic location, interest rates, your capitalization level, the amount and terms of any financing that you may secure, the property values and lease rates, your business and management skills, staff strengths and weaknesses, and the cost and effectiveness of your marketing activities.

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