As someone who has run a small flight school and a large flight school, here is some perspective:
1) Small school: Easy to do. Easy to manage amount of students. Easy to manage CFI's. Easy to oversee flight time. Less payments to have to worry about per day.
2) Large school: Can you imagine processing 100 student payments in one day? On top of that, if students use credit cards, there is a charge per swipe. So that raises costs for students.
Bottom line is this: Get a contract. If there is a contract, you have legal standing in a court of law. You wouldn't hand a person on the street a bag of money, right? So before handing over a large amount to a flight school, get something in writing.