Few people in the martial arts industry have run schools as long as Dave Kovar. He opened his first commercial facility in November 1978, at 19, and has taught full time ever since. Today his company operates 18 corporate-owned schools, nine in the Sacramento region and nine in New Jersey and New York, with roughly 5,000 members. He holds black belts in multiple arts, has trained Brazilian jiu-jitsu since 1994 under Cesar Gracie, and coaches other owners on best practices through Kovar Systems.
His central argument: the industry has changed. In the 1980s and 1990s, a mediocre operator could make a living because demand outstripped supply. Kovar estimates Sacramento County went from about 18 listed schools when he was in college to something like 300 today. "Now you have to be excellent. That's your starting point," he said. Excellent means great teaching and solid business systems for enrolling, retaining and staffing.
Bigger Isn't Better: Keep Your Overhead Lean
Kovar's headquarters in Sacramento has four mats and once held more than 900 members, but he's quick to say he wouldn't replicate it. His newer locations are around 2,000 square feet, and his first school was 1,000. The trap, he says, is falling in love with a big space and then writing a rent check every month that forces you to chase enrollments.
His location advice is to find a good area where families earn a decent income, but not necessarily the prime corner, which costs more. Early on he picked spots purely on cheap rent; the opposite mistake is a big, prime space with rent so high you need dozens of students just to cover it.
Host Brian Debes added that he has watched several heavily funded "super gyms" with famous instructors go bankrupt. Kovar's take is that many were run like health clubs, with rotating part-time instructors and nobody personally responsible for each student. In a martial arts school model, a student is connected to an instructor who knows when they're absent, knows when they're ready to promote, and gives them feedback.
Know Your Quit Rate, and Push It Down
When owners come to Kovar for coaching, they usually say they just need new members. When he looks at their numbers, the real problem is often a high quit rate.
His company targets a monthly quit rate of 3% or below. At 3%, a 300-member school needs nine new members a month just to break even. Kovar is candid that his company as a whole has never held that for a full year; its best has been in the high 3s, and it usually runs in the low 4s. Most schools he reviews sit at 6% to 8%. Debes noted that in Red Belt's own data, staying under 5% puts a school in roughly the top 10% of the industry.
His first rule: know your quit rate, because most owners don't. His second: whatever it is, work to make it better.
Be Careful with Paid-in-Full Memberships
Kovar is wary of paid-in-full agreements. He has coached owners who had 250 members but little monthly income, because most had prepaid and the money was already spent, leaving the owner dependent on constant new sales. He also admits that prepaid accounts tempt owners to stop chasing absent members.
If you offer paid in full, his guidelines are:
- ✓Discount no more than 10%. Add value with private lessons, retail or special events instead of deeper discounts.
- ✓Put the money in an escrow account and draw it down over time, because it isn't yours yet.
- ✓Know your state's rules. Kovar says that in California, a student generally doesn't have to pay for services not rendered.
Schools that collapse after taking prepayments hurt the whole industry's reputation.
Grassroots Marketing Still Wins
Kovar's team tracks lead sources closely. About 54% of their leads come from online channels like Meta, Google and their website. But 65% of actual new members come from grassroots efforts: asking for referrals, buddy days, self-defense clinics and similar old-school tactics. Many schools, including his own, dropped that work during COVID. Without it, he says, they would have about a third as many new members.
He also offers a second meaning for "AI": authentic interaction. Students who feel a real connection to their instructor will drive past other schools and pay more to train with them. Technology is essential, but human connection is the advantage that keeps a school relevant.
Three Things to Do in a Student's First Months
Kovar's retention framework for new students has three parts:
- Build the habit. Give new students standing appointments, such as Tuesday and Thursday at 6:00, and tell them you're expecting them. Automated missed-class texts help, but after a couple of absences, call or send a quick personal video.
- Create a "white belt moment." You can't schedule the moment someone falls in love with training, but you can look for chances to make the light bulb go on.
- Get them thinking long term. Help students picture themselves four or five years out and identify as martial artists, so injuries, busy weeks and illness don't stop them. He tells new parents his goal is to keep their child until college.
That message has to be repeated in fresh words. Kovar delivers it at the end of class after hard training, when people are receptive, reminding them that good and bad days are normal and the key is to keep showing up.
Systems for Encouragement
Kovar's schools teach instructors specific routines:
- ✓Praise, correct, praise. Aim for twice as many praises as corrections. Kovar notes Pat Riley used a 5-to-1 ratio with some athletes. Sincere praise makes students more receptive when correction comes.
- ✓The 3x3 rule. Connect with every student three times a class: use their name, make eye contact and make physical contact, like a knuckle bump.
- ✓Teammate shout-outs. End class by asking who has a shout-out for a teammate, especially newer students or those who made progress, not the obvious star.
- ✓Correct the group first. If a few people make the same mistake, address the whole class, then give one-on-one help if needed.
Key Takeaways
- ✓In today's market, excellence in both teaching and business systems is the minimum.
- ✓Keep overhead lean; a well-placed 2,000-square-foot school can be very successful.
- ✓Track your monthly quit rate. Kovar targets 3% or below; under 5% is strong.
- ✓Limit paid-in-full discounts to 10% and hold prepaid funds in escrow.
- ✓Don't abandon grassroots marketing: it produces most of Kovar's new members.
- ✓Build retention into the first months with habits, a "white belt moment" and a long-term identity.
Hear It from Dave Kovar
Kovar's closing advice was to stop comparing yourself to other schools, stick to the basics, and show up every day. Listen to the full episode on Spotify or watch on YouTube.
Tracking quit rates, automating missed-class follow-ups and keeping members engaged are exactly what Red Belt Software helps martial arts school owners do to improve retention and grow.