In a deal School of Rock CEO Rob Price described as a “blockbuster for us,” the music education franchise joined Youth Enrichment Brands as the fourth company in the youth activities platform.
“We saw many advantages of scope and scale, and YEB had the best combination of that,” said Price as he listed “everything from buying power to more sophisticated data analytics and more thoughtful targeted marketing” among the benefits for School of Rock.
At its 350 locations, School of Rock offers a range of music lessons in guitar, bass, vocals, drums, and keys, along with songwriting and performance programs plus options for adults. The Canton, Massachusetts-based company had been receiving a lot of external interest, said Price, and in early 2023 formalized a process to find a buyer. Youth Enrichment Brands, he added, stood out from the beginning. The deal closed September 1.
Backed by private equity firm Roark Capital, Youth Enrichment Brands formed in late 2021 following the acquisition of youth sports league franchisor i9 Sports. i9 joined US Sports Camps, which Roark bought in 2020, and YEB added Streamline Brands, franchisor of swim school concepts SafeSplash, SwimLabs, Swimtastic, Saf-T-Swim and Miller Swim School, in June 2022.
Roark, which owns multiple franchise platforms including Inspire Brands, Focus Brands and Driven Brands, developed a strong investment thesis around youth activities and sports, which led it to purchase US Sports Camps, said Justin Hoeveler, CEO of Youth Enrichment Brands. His father, Charlie Hoeveler, founded US Sports Camps, and with the sale Justin Hoeveler became chief executive and was later tapped to lead YEB.
School of Rock, he said, “fit perfectly” under the YEB umbrella. “It’s a best-in-class, category-defining brand in the music education space,” said Hoeveler. “And it’s complementary to our other brands.”
Price, who came on board as School of Rock’s CEO in 2017, said the brand and its franchisees will be able to tap into best practices from across the YEB platform, such as what he termed “alumni management.”
“Just because a student ages out, doesn’t mean they need to leave our system,” he said, and School of Rock can make strides in maintaining relationships that help with instructor hiring and franchise development. “Former students and their parents make fantastic future franchisees.”
“Enormous” cross-selling opportunities also exist on the consumer and franchise sales fronts, said Price, with YEB able to deploy rigorous data science and enhanced technology to boost marketing efforts.
“Everyone at YEB, including me, is a bunch of geeks. We’re really geeky,” said Price of his excitement on the data front and the ability to also provide more insights to franchisees that can impact their business.
In addition to domestic development, School of Rock plans to continue pushing international expansion. Of its 350 locations, 74 of them are international, in countries such as Australia, Brazil, Mexico and the Philippines, and that experience will come in into play as YEB’s other concepts look outside the U.S.
“Music and sports are both international languages,” said Hoeveler, as he and Price each noted they’ll take a thoughtful approach to new unit growth.
Franchisees, said Price, received real-time updates on the transaction, and it was discussed often with the brand’s independent franchise association. He’s had numerous conversations with franchisees since the deal closed and, “universally, there’s been amazing enthusiasm.”
“One of the things we’ve explicitly heard is, don’t mess with success,” continued Price of the franchisee feedback. School of Rock is committed to its purpose-driven culture and won’t sacrifice that in pursuit of growth, an approach he said YEB understands and embraces.
“It’s not just stuff we’re selling to kids. We’re helping kids develop into the best versions of themselves,” he said. “The propellant” with YEB “is a common purpose and culture.”
The investment range for a School of Rock franchise is $441,000 to $593,900. Its franchised locations had average sales of $623,161 in 2022, with average student enrollment of 192, according to the company’s franchise disclosure document. Franchised schools open for at least two years had average sales of $643,534.
Read the original article by Laura Michaels published in Franchise Times.