The master franchise model, and why maybe they're right changed everything: Stacey Ryan of School of Rock

School of Rock tried running international expansion directly and concluded they were the wrong people to do it. The fix was a master franchise structure, and the reason is more honest than most expansion strategies get.

Stacey Ryan is COO of School of Rock, the performance-based music school with more than 350 locations across 19 countries, teaching upwards of 60,000 students. She is also the founder of Frontwoman.org, an organization supporting women in leadership.

And she opens with a correction Michael did not see coming. School of Rock predates the film. It started five years before the movie, which was loosely based on the school rather than the other way around.

For the record, Jack Black is not involved in the business.

The hardest operating problem

Her general answer is a good frame for anyone in a business involving children: people entrust them with their two most prized possessions, their children and their money, and the job is protecting both, children first.

Her specific answer is the pandemic, and her description of why is memorable. This is a business built on putting people in a room, screaming into microphones. As she puts it, COVID was designed to destroy them.

But she is clear that the music is only the first part. School of Rock is dealing with depression, with suicidal ideation, with mental health. A great many students and instructors find it is the first place they feel like they belong and are not different, because it is just the music.

So the closure was not only commercial. And they operate in 19 countries, which meant working out each country's rules alongside the question of how to keep the music going.

Her stance on the priority was uncompromising: health and safety first, and she says they were unempathetic about it. If someone disagreed with a decision made on that basis, her position was that this might not be the right place for them right now.

And then the part she describes with visible pride. It was the most challenging period of her career and also the most rewarding, because the community pulled together in a way she had never seen. Daily calls, sometimes everyone, sometimes owners, sometimes just the operations team, with the premise being to throw out the School of Rock book of knowledge and start again at page one, line one.

What survived the pivot

The main pivot was to remote lessons. They already had a platform, which has since been replaced by a purpose-built School of Rock Online rather than video calls.

The execution was overnight. Operations, marketing, education and IT working in the same document through the night: here is how you do it, here is how you set it up, here is what teachers need to sign, here is how everyone knows what is expected.

What is instructive is what they kept.

Online lessons persist as an option. If a student is unwell, they do not come in, they convert the lesson. If a family travels for a month in summer, the student does not miss a month.

And livestreamed shows, which turned out to matter more than anyone predicted. Her reason for never removing it is an email from a grandmother in Florida, who described crying while watching her grandson perform in Texas, the first time she had seen him in a School of Rock show, ending with a request not to take it away.

There is also now an online-only option for people in places where School of Rock does not yet exist.

Michael's connection is to an earlier episode with GetYourGuide, where the pandemic accelerated digital habits that were already worth having. The pattern repeats: the constraint forced a capability the business turns out to want permanently.

How belonging gets enforced

Michael, a musician himself, raises something interesting: playing music is a stress relief and also makes you extremely vulnerable. How do you teach around that?

Ryan's answer is that belonging is a core value, and the enforcement is real rather than aspirational. There is a code of conduct everyone signs. Bullying can mean removal from a band temporarily, or expulsion.

The stronger mechanism is the AllStars program, and its selection criteria are the part worth copying.

Of roughly 65,000 students worldwide, a subset apply. They go through local school auditions, video auditions, then live auditions, narrowing to around 170 students. Those students are cast into seven teams and assigned songs and parts, fly in, rehearse together for two and a half days, then tour by bus, playing a different city and venue every night for ten days, at stages including Red Rocks and Lollapalooza.

Here is the filter. You can be the best musician in the entire organization, and if you are not a student who walks over to introduce yourself when a new student arrives, you are not allowed to apply.

And the standard continues on tour. You load your own gear in and out. You help each other. Anyone who has hosted School of Rock students will confirm the green rooms are left spotless, because the last question is always whether the room is clean.

Her framing: every opportunity to instill those habits, they take.

Waded in, then reorganized

Ryan has spent her career in operations across three organizations. Her first year at School of Rock was the exception, doing events and partnerships, until the former CEO asked for help with company operations.

She started with company operations at 16 schools, which is now 48 owned and operated domestically. Then took on franchise operations, then international.

Her method at each step was the same and it is the right one. Seek feedback first. Tell me what is going on, what is going well, what is missing, what is being done wrong. Full listening mode, then analyze the data and KPIs and see where the two line up.

The reorganization that came out of it addressed a structural problem. They had a company operations team and a separate franchise operations team, which produced exactly the suspicion you would expect. Franchisees asking what was happening on the company side that they were not being told about.

Her judgment: there was nothing being withheld, and there was no reason not to have one voice and one approach. Merging them worked.

They still run the feedback cycle annually, with her VP of Domestic Operations, asking where they can be better.

How you actually design a reorg

Michael asks how she evaluates and executes a restructuring, and her answer is refreshingly unglamorous.

She says she wishes she had a more sophisticated answer, and what it actually was: a lot of quiet time alone with a large whiteboard. She drew a map and erased it repeatedly, and it was not until the fifth or sixth version that it felt right.

Her advice is to give yourself the freedom to work through it and accept that the answer does not arrive immediately. Sitting with the problem, stewing on it, exploring the options, going down a path, realizing it will not work, and returning to the beginning.

The growth that forced it: 100 schools became 360. Ten thousand students became more than 60,000. Each time, the structure had to change to maintain the same level of support.

The specific change is a good example of solving for the constraint rather than the symptom. Directors of Operations oversaw territories and both managed general managers at company schools and consulted franchisees. As both grew, they were spread too thin, and support suffered on both sides.

Rather than split the roles and lose the one-voice principle she considered essential, they added a layer underneath: someone focused specifically on general managers, working alongside the Director of Operations who supports the franchisee. Same single voice, appropriate depth of support. It also opened up career path and development opportunities.

Put it in a box

Michael raises the structural oddity of franchising: at company-owned locations you have a direct relationship with customers, and with franchisees your customer is the franchisee, with the actual students one step removed.

Ryan's answer is that they consider everyone a customer, while being careful about who owns the relationship, because franchisees build a deeper one than corporate does.

Her operating principle is the phrase to steal: put it in a box.

Meaning that whatever corporate hands a franchisee should contain everything they need. Marketing collateral. A how-to guide. Instructions for the operating system. Communication templates for families and staff.

And the reason it works is the reason the one-voice structure works. Because School of Rock owns and operates 48 schools, they are producing all of this anyway. They write the communication template telling general managers how to word this year's price increase to parents. So they hand the same template to franchise owners in that territory, who can use all of it, half of it, or none of it.

Michael's observation about the tech parallels is a good one. Territory planning for franchisees is territory planning for a sales team. A franchisee is a partner sales channel. Good operations transcend the context.

Why international became master franchise

This is the section with the most transferable judgment in it.

For years School of Rock ran international directly. What they learned, in Ryan's words, is that they do not know the culture outside the United States. They do not fully understand the culture in Mexico, in the Philippines, across the globe.

So while some direct international franchisees remain, every new country now comes on as a master franchise. Brazil, Chile, Mexico, Spain, Portugal.

The structure in Brazil, their second largest country with more than 40 locations, is a master franchisee who operates as a franchisor in his own right. He is School of Rock's franchisee. He sub-franchises to his own direct franchisees.

What that layer buys them is the ability to catch nuances they cannot see. Her example is from the pandemic, which she can laugh about now and describes as a sobbing moment at the time: corporate pushing out information at speed, and the Brazilian master franchise converting all of it to Portuguese before distributing it onward.

Michael's follow-up is the obvious risk. A master franchise puts another step between you and the end customer. How do you preserve the learning and the sense of what is working?

Her answer is relationships rather than reporting. Meeting franchise partners at industry conferences. Visiting Brazil, seeing the schools, attending their annual convention, meeting their owners. Her description is of a transparent relationship where frustrations get raised in both directions, and where she says they genuinely like each other as friends as well as partners.

Her conclusion: they are a critical component in solving problems inside their own country and territory, which is the whole point of the structure.

Company-owned or franchised

The location decision uses analytics software common in franchising, identifying markets they are not in and assessing viability, combined with a franchise development team with decades of experience.

The company-versus-franchise question turns out not to be a question at all. They do not open new company schools. The company-owned portfolio has grown through other routes, most commonly a franchisee who has put in 15 or 20 years and is ready to exit, asking whether School of Rock would be interested in their school.

Her framing: they are believers in their own concept, so when a strong school becomes available, sometimes they take it.

Trust your gut, and internalize the turnover

On hiring, Ryan's first observation is that it is like gambling, in that you never fully know until you are in it.

What she has learned is to trust her gut, which she says is hard for newer managers. Her coaching line: if there is something going on in your gut, if it is a maybe, it is a no. Maybes turn into nos. Nos do not turn into yeses.

The other requirement is patience, which is where Michael agrees, on the grounds that hiring the wrong person costs more than taking another month.

What distinguishes her answer is what she does afterward. She does not attribute turnover, voluntary or otherwise, to circumstances beyond her control. She internalizes each one and asks what the learning is, what they could do differently, and what was missed in screening or onboarding.

Ask what is next, then make a call

Her development approach is a specific behavior rather than a program.

When she speaks with staff she asks what their next step is, who their bench is, who they are preparing. She learns what they are interested in and tells them she is a champion of theirs, whether that is at School of Rock or elsewhere.

Her example is a general manager in Texas whom she rates highly. In a one on one, Ryan learned she was studying graphic design and that this was what she actually wanted to do.

So Ryan called the head of marketing and asked whether they could use help. They could. That general manager now works with the director of creative on design work. If a role opens in marketing, they already know her. And if it is not at School of Rock, she has the experience and a large organization on her resume.

Her reasoning is simply that she has had good mentors and is at the point in her career where she wants to pay it forward.

Maybe they're right

The most valuable idea in the episode came from CEO Rob Price, who joined when the relationship between franchisees and the corporate office was adversarial, with an us-and-them dynamic.

He instilled two things.

Maybe they're right. The rule is that when a franchisee tells you something, you cannot go straight into defense mode and explain why they are wrong. Ryan says the freedom and safety of being wrong, and of that being acceptable, changed how the whole team operates.

Never say anything contentious about a franchisee. Even in a heated moment, even after a difficult call, you cannot hang up and call someone a name.

What you can say is that you spoke with them, they care a great deal about this topic, and it is going to keep coming up.

Ryan is careful to say they were not an organization that spoke badly of people. The point is subtler. It is easy to end a call with someone who has been angry and dismiss them, and the reframe forces you back into considering that they might be right.

Her assessment: it changed how she looks at franchisees, at partners, at herself and at her team, and it is one of the most powerful pieces of growth in her career.

Frontwoman

Ryan founded Frontwoman.org out of the same instinct to pay it forward.

Her account of why is direct. She fought her way up through corporate America, fought to have a voice in the room, and sat at too many board tables where she could count the women on one hand, one of whom was there to take notes, with fourteen men around the table.

She credits Sheryl Sandberg's Lean In, which she has bought roughly eight times, because whenever she rereads it and a young woman asks whether it is good, she gives it away. What it taught her was to remind herself that she is in the room because she belongs in the room.

Her early ambition was explicit. As an entry-level employee, asked by a regional manager what she wanted to do, she said she wanted that manager's job, which the manager found startling.

The numbers she cites: around a quarter of C-suite roles in corporate America are held by women. Men and women enter the workforce at the same rate, and by VP level, for every ten men promoted, roughly seven women are. The gap widens as you go up.

Her description of being appointed COO is worth quoting for anyone who has been climbing. For the first time she felt she could exhale, sit in it, and stop being laser-focused on the next step. And with that came a sense of responsibility to other women given how small the representation is.

Frontwoman began as an employee resource group inside School of Rock. About three years before the recording she concluded it was too big and too impactful to keep confined, so she removed it from the company entirely, took ownership, and opened it to all women.

The format: a quarterly newsletter highlighting one woman from any industry, asking what she has learned and what advice she has. And quarterly meetings, one of which each year is a panel, the rest workshops on subjects including navigating microaggressions and body positivity, with small group discussion.

Her measure of whether it was worth it is a woman who came over at a music conference to say thank you.

Rhythm, not balance

The advice from a recent panel that she found most useful came in answer to a question about work-life balance.

Nearly every panelist rejected the premise. There is no perfect balance.

Lindsay Love, who works in artist relations for Taylor Guitars, offered the musician's version: rhythm. Am I in the right rhythm? Sometimes the tempo is faster and sometimes slower, and the work is playing to the rhythm the current situation calls for.

Ryan likes it because looking for balance creates pressure, and because balance means something different for everyone. Hers is weighted toward work, by choice, because she loves what she does and does not mind checking in on a Sunday.

The other exchange she highlights: she asked Chris, the CEO of Shure, who studied engineering in a cohort of roughly 300 students that included eight women, whether she ever felt she did not belong. The answer was every single day.

And her own story about image. Early in her twenties, a woman several levels senior told her she needed to pull her hair back and wear lipstick to increase her sales. Ryan is not a lipstick wearer and did not. She is glad she was strong enough at that age to decide that was not who she was and to find another way.

The answer she got from the panel on that subject is the one she kept: I dress the way I dress to feel the confidence I want to feel in that moment and in that meeting, and I do not care what others think. What I care about is how it makes me feel.

The 5 things I took away from this conversation

1. Maybe they're right, as an operating rule. Not a value on a wall. A rule that when a partner tells you something, defending is not the first move. Combined with the second rule, that nobody speaks badly of a franchisee even privately, it makes the first one enforceable, which is why it worked.

2. Put it in a box. If you run both company-owned and franchised locations, you are already producing every template a franchisee needs. Hand over the whole box and let them use as much of it as they want. That is a much better answer than writing separate franchise guidance.

3. Run international through people who know the culture. School of Rock's honesty here is unusual. They tried direct expansion and concluded they did not understand the markets. The master franchise adds a layer between them and the customer, and that layer is the thing catching what they cannot see.

4. Selection criteria are how you teach values. You can be the best musician in the organization and still be ineligible for the AllStars if you do not walk over to a new student. Anything the company genuinely cares about should show up as a gate somewhere.

5. Rhythm rather than balance. Sometimes the tempo is faster, sometimes slower, and the question is whether you are playing to the right one right now. I have never found the balance framing useful, and this is the first alternative that does something.

FAQ

What is a master franchise? An arrangement where a company grants one partner the rights to develop a whole territory, usually a country, and that partner then operates as a franchisor themselves, recruiting and supporting sub-franchisees. School of Rock's Brazilian master franchisee runs more than 40 locations through his own franchise organization.

Why use a master franchise for international expansion? Ryan's reason is cultural knowledge. School of Rock expanded internationally on a direct model for years and concluded that as a US company they did not understand the markets well enough. The master franchisee provides local judgment and, practically, translation and adaptation of everything corporate sends out.

How do you stay close to customers through a master franchise? Through the relationship with the master franchisee rather than through reporting. Ryan visits their markets, attends their conventions, meets their owners, and describes a transparent relationship where frustrations get raised in both directions.

How do you support company-owned and franchised locations at once? School of Rock deliberately merged its company and franchise operations teams into one, because separate teams created suspicion that information was being withheld. Everything produced for company schools, including customer communication templates, is passed to franchisees to use or ignore.

When should a franchisor restructure its operations team? When growth spreads support too thin. School of Rock added a layer beneath its Directors of Operations, focused on general managers, once the company-owned estate grew from 16 to 48 schools. The constraint was maintaining one voice to franchisees while restoring depth of support.

Also mentioned

• School of Rock, its AllStars program and School of Rock Online
• Frontwoman.org, Ryan's organization for women in leadership
• Lean In by Sheryl Sandberg, the book Ryan keeps buying and giving away
• Rob Price, the CEO who introduced maybe they're right
• Shure and Taylor Guitars, whose leaders joined the most recent Frontwoman panel
• Red Rocks and Lollapalooza, among the stages the AllStars tour plays

Listen to the full episode

Stacey Ryan on Between Two COO's

Between Two COO's is hosted by Michael Koenig. Subscribe on Apple Podcasts, Spotify, or wherever you listen.