One School or Several? The Margin Math Behind Expansion

For most martial arts school owners, one well-run school is more profitable than several. A single school of about 300 active students can produce $1 million to $2 million a year in revenue at roughly 50% to the bottom line, with simple systems and a manageable workload. According to Grand Master Stephen Oliver, the largest multi-school operators typically net 7% to 15%. Expansion makes sense when an owner wants to run a larger organization and already has systems and management talent in place. It doesn’t make sense to fix a struggling school or to give an instructor somewhere to go.

“Should I open a second location?” is one of the most common questions school owners ask, and one of the least analyzed. At the October 3, 2026 Martial Arts Wealth Mastery live event, Grand Master Stephen Oliver, CEO and Chairman of NAPMA and Publisher of Martial Arts Professional, gave his answer from experience: he opened and ran six schools in the Denver metro area, and his Mile High Karate organization later served thousands of students across the region.

Is there a signal that it’s time to open a second school?

No. “There is no internal factor that tells you when it’s time to do a second school,” Grand Master Oliver said. There is one clear signal that it isn’t: if you have one failing school and open a second, you end up with two failing schools.

He frames the choice as a lifestyle decision, not a growth milestone. Does the owner want to run a large organization with many moving parts, or would they rather have the most income, the least stress and close relationships with their students?

What can a single martial arts school earn?

More than many owners aim for. Grand Master Oliver described the single-school benchmark this way: “One profitable school easily is 50% to the bottom line. 300 students plus or minus.”

• About 300 students is a size where you still know every name and the school feels like a family.
• 400 to 600 students can still be run that way with the right staffing.
• $1 million to $2 million a year in revenue, “maybe even more,” is achievable at that size with simple systems.

The mistake, he said, is setting the target at $20,000 to $30,000 a month. At that level a school typically nets 10% to 15%, and the owner ends up “making less money than I could make in a lot of other jobs and professions.”

What do multi-school operations actually net?

Far less than owners imagine. The tempting math goes like this: one school does $100,000 a month and nets $50,000, so five schools should net a quarter million a month. “Never works that way,” Grand Master Oliver said. “The biggest multi-school owners that you know are mostly running somewhere between 7 and 15% to the bottom line.”

Part of the reason is the 80/20 rule, which in multi-unit operations is sometimes closer to 90/10. A minority of locations outperform, and their profit props up the weakest. Speaking of his own six schools, he said there were always two performing exceptionally well and a couple where he was deciding whether to replace the staff.

Why is two schools the hardest number?

“I’ve said for years, I think it’s true, two is the worst thing to have,” Grand Master Oliver said. With two schools there usually isn’t enough management talent for both, and owners tend to make a structural mistake: they call one location “the main school” and treat the other as a satellite. When that happens, the satellite drains time and money from the main school, and the main school’s profit-and-loss statement often ends up carrying the second school’s marketing, website and payroll.

He described the most common pattern as revenue shifting rather than revenue growth. The owner leaves a $100,000-a-month school to open a second one without systems in place. Six months later the first school is at $70,000 and the second at $30,000. Later it’s $60,000 and $40,000. “I’m replacing the revenue here from the one here,” he said. The total hasn’t grown, but the workload has doubled.

How did he expand successfully?

Sequentially, and as a marketer rather than an instructor. He opened one school, filled it, installed systems and moved on to the next, through six locations. In his account, he spent most of his time and effort on marketing and did the enrollment conferences face to face, but did not take the instructor role in any of them. Each school was handed to its team with systems in place before the next opened.

When a location lagged, he sometimes stepped in personally to take it past the top-performing school. That removed the “our area is different” excuse. When the excuse became “only he can do that,” he moved a strong manager into the struggling location with an extra incentive tied to billing milestones, so that the move felt like an opportunity rather than a demotion.

What is not a good reason to expand?

Keeping a good instructor. Owners often open a second location because a senior instructor wants to run something of their own. Grand Master Oliver called that understandable but not a reason to sign a lease: “That’s not a good reason for me to put, you know, my finances on the line for me to go sign the lease, for me to do all that stuff, because this guy needs a job.” Partnerships, licensing and helping a trusted instructor open their own school are alternatives that don’t put the owner’s own finances at risk. Any franchise or licensing structure should be reviewed with a franchise attorney.

What is the honest upside of multiple schools?

Scale brings things a single school can’t: intramural tournaments with hundreds of competitors, black belt retreats and large theater shows. Grand Master Oliver enjoyed that era. But Grand Master Jeff Smith, MAWM’s Chief of Instruction, who helped run a large multi-school operation in the Washington, D.C. area, put the trade-off plainly: “All the headaches you have now, staff or bad month or whatever, multiply it times 10.”

Distance creates its own problems. Small issues an owner would fix in a day at one school go unresolved at a location the owner rarely visits. Unanswered complaints and slow follow-up show up in public ratings and reviews.

The bottom line

The industry often treats location count as the measure of success. The numbers Grand Master Oliver shared suggest a different measure: profit per school and quality of life per owner. For most owners, the better next step is a second hundred students at their first school, not a second lease. For a longer view of how the school business has evolved, see the history of the martial arts business in North America, and read more about Stephen Oliver.