I understand where you're coming from, but I think that approach is backwards. Looking for a location first then adjusting the tuition after you've bought/leased the place isn't a great business model. I think instructors should know what their income is and only get a place that they can afford without a lot of students. If you need X amount of students to pay the bills and half your students leave is it fair to start charging the remaining students double? I think staying within a reasonable price point for a location is a good way to avoid those kinds of problems.
Forgive me if I misunderstand, but it appears you're talking the difference between the high street and the industrial estate where you're looking at the same clientele.
I'm talking the difference between Stockbridge and London...
Also, your statement looks like from a school owner perspective, whereas I'm coming from a potential customer.