Steps for creating new sites for schools

Hey everyone,

I'm having a hard time finding the best solution for the task at hand. Here's what I am trying to do.

I'm building a system for our 200 schools where they can go to our site, sign up for a new school website and it creates a new site for them where they have access to edit and update all their own pages, posts and themes. Pretty straight forward I would think however I'm getting really confused as to what plugins to use to make this happen.

What am i missing here? Is there anywhere that someone has seen a step by step or 'how to' create something like this?

Again, all I need is a simple sign up, it creates a new sub-site and the user can login to their sub-site to update their own content.

As a bit of a twist or maybe the reason this isn't working is I'm using Gravity Forms as the sign up.