As a student, just recently this was what I was up against. I had just purchased a fair amount of lesson when one of the 2 instructors I work with was leaving in a month’s time to go to an independent studio, yet I was not told this prior to purchasing the lessons.
Well, suppose I only go to that studio to learn from the teacher who is leaving, I am not going to be happy being made to follow through with the 20 or more lessons with teachers that I do not like.
I was made to sign a 5 then 10 lesson once. I told the instructor/owner that I only want to take instruction from him as he is the only technically advanced teacher there and I am planning to compete. Now, he promised me that then kept on double booking me resulting in me having to take lesson with different unexperienced teachers all the time when he is suddently becoming unavailable. He never called me prior to my lesson, he just told me when I am already in the studio.
Now, I was very very unhappy there.
I am with independent studio now and desperately want to take more lesson. No one told me to sign up for anything. I pay as I go, sometimes when I forget the teacher just brush it off and told me to pay next week.
I will not leave the studio for anything. I LIKE it there. I think the best way to keep student is not to TIE THEM UP with several paid up lesson. Because if and when they are unhappy they will feel like you are cheating them. This is not good for the long term because people will leave eventually. You really want long term people who want to be there because they like your studio and teachers not because they have paid a set number of lesson and cant get out.
Also, I run a boarding house. I always told people that they can leave at any time as long as they let me know 1 months in advance. Well, people never sign long term contract with me BUT they stay for ages because they like the house.
My friend however run a similar joint but she made everyone sign min 6 months lease. What happened is people keep on running away from her by not paying rent on time and just leave at night.
Moral of the story is you just cant force people to stay, they have to want to stay otherwise not only they will be upset with your studio, they also will talk bad to everyone about it.
The studio I wrote about above is so notorious everyone in the dance circle knows about it and joke about it all the time. They still 'trap' newcomers BUT these people also leave eventually.
Also, I agree on quarterly/yearly bonus rather that different rate/hour. That way people can structure their lesson around the teacher/student competition/wedding seasons/new dance program on TV timings.