"I would cater for the beginners and after a priod of time tell them there next move is to some other studio who cater for the intermediate."

This doesn't work. Even a teacher who is OUTSTANDING at teaching fundamentals (and I can think of good examples) cannot run a full studio if they export their more advanced students to setting that is not visibly, publically, connected back to them.

Reason being that they need more advanced students around to advertise their qualifications to beginners who do not yet know enough to recognize good teaching for its own merits. Instead, the new students will follow the advanced ones to the "advanced" studio - even if the teachers there are unprepared to teach fundamental skills to beginners, will book lessons but not put their heart into it, or will assign this work to assistants who are incapable of doing it properly.

As for the problem of people taking classes above their level, that is easily solved. Teach simple material in advanced detail. The people who don't belong will become bored at the "low level" of the class and leave, while those who do belong will soak up the wealth of information eagerly, in whatever amount of detail they are currently ready for.