Some nights, our Black belt has to go to Judo practice(he's learning it right now) so a really strong Blue belt teaches us. You still learn a lot from them, they can answer quite a few questions and if they're good teachers it's good.
I DO have an issue with a purple-belt opening his own gym however. Purple belts, in the grand scheme of things, are still in the realm of mediocrity. Perhaps they're not mediocre teachers, but they have so much to learn, otherwise, they'd be black belts. I just feel that if you want to open your gym and make a living off of it, first you have to take yourself to the level of excellence.
For example, I am very capable of teaching someone piano, but I abstain because there's no way I would be able to give someone the same level of instruction as say, my last teacher, who had a master's degree.