The pilot had been familiarizing himself with the operation of the tailwheel-equipped airplane in preparation for utilizing it to provide flight training. During the 2-week period leading up to the accident he had practiced multiple takeoffs, landings, and touch-and-go landings, many of which were performed at the accident airstrip. The pilot reported that he had requested that a volunteer sit in the front seat, so he could familiarize himself with flying from the rear seat. After an uneventful flight, they performed a touch-and-go landing on the dirt airstrip, however, during climb-out the airplane began to rapidly sink. The pilot reported that he asked the passenger to retract the flaps, because the control was positioned next to the front seat. The pilot applied forward elevator control attempting to gain airspeed, but the airplane continued to sink. He elected to perform an off-airport landing on a dirt road just beyond the runway; however, during the landing roll the right wing struck a ditch and sustained substantial damage. Postaccident examination of the airplane revealed that the passenger had not retracted the flaps as the pilot had instructed, and they were in the fully extended position. The pilot reported that there were no preimpact mechanical malfunctions or failures with the airframe or engine that would have precluded normal operation.