The certificated flight instructor and student pilot were departing runway 26 on an instructional flight in a tail wheel equipped airplane. The first pilot/certified flight instructor (CFI), who was seated in the right seat, reported that during the takeoff roll with the student pilot manipulating the flight controls the airplane drifted left of runway centerline. The student pilot corrected the situation, but the airplane began to track right of runway center line and the CFI took the flight controls. The first pilot stated he applied left rudder and brake, but the airplane continued to track to the right and eventually exited the right shoulder of the runway. After exiting the runway, the airplane collided with a large rock and the left main landing gear strut collapsed. The airplane sustained substantial damage to the left wing. Following the accident, the CFI reported that the brakes functioned properly during the preflight, however, appeared to have not been working during the accident sequence. A representative from the FAA examined the airplane and reported that the brakes were damaged and functional testing was not possible. The pilot reported that the wind was from the west at 4 knots.