The day you open a commercial location to teach you have to consider making money, unless you personally finance it out of your kind heart. Without commercial martial arts the martial arts would not be where it is today and would likely go underground with most of us having no where to train.
I agree with this, pretty much. Running a martial arts school (or probably any business) is very expensive. Since this is an anonymous nick, I'll be real straight. Mr WaterGal (who's a master) & I opened a dojang 4 months ago. We have 24 students on contract so far, and that's not even enough to pay the rent on the space, let alone all of our other bills (advertising, liability insurance, utilities, etc) or any personal income. Contracts etc aren't (necessarily) about ripping students off, they're about having a steady stream of income so you can stay in business.
I think what's really relevant is whether students are getting their money and time's worth out of the classes. If you can teach something really good and challenging, provide a great supportive environment and community, and help people really grow and improve themselves, they'll be happy to pay $99/month or whatever. (We let students try the school out for a month before committing to a contract, and so far nobody's only done one month and left.)
The problem is when schools hand out belts to whoever's stuck around for X months and don't challenge the students or teach them anything worthwhile, while expecting the same time and money commitment. If I was going to call a school a McDojo, it would be for that reason. We recently got a new TKD student who had been studying with one of our competitors for 2 years, and another that had been there for I think 1 year. Their kicks weren't as good as some of our students that have been here for 3 months. One of their instructors(!) contacted us recently and is interested in joining us as a student, because apparently the master is only there a few hours a week and doesn't teach him anything. I don't want to disrespect the other school or jump to conclusions when I don't know them, but I'm starting to get a feeling about that place, you know?