Mar 24, 2019
I agree. Good advice!
You can't take it with you. You are captive to that franchise, even though they offer you 100+ carriers as an independent agent.
Superior Access you own the expirations and can move it, but with Brightway and Goosehead you can not. Being a franchise is like being a Farmers Agent.
Superior Access has been difficult to deal with. So slow and you do not have binding authority.
The one thing I've learned is that "own" is an often misused (not in a good way) term. The expirations will ALWAYS follow the code (Go ahead and ask your carrier partners). So when you leave, and this is true pretty much anywhere you would need to actively move through rewriting or doing a BOR change for each line of business. To facilitate a literal "It all goes with you" there would have to be a direct appointment from you, the sub-agency to the carrier and the master would have to agree to release each policy from the master code. I say good luck getting your conversion rate where it needs to be when your customers have only dealt with you at the time of the sale.
Things are further complicated by non-competes (which again, the word own gets used a lot... anyone wonder why?) Because in most states where a non compete is deemed unenforceable, they are much moreso in situations where there is "OWNERSHIP" involved. Much less in subcontractor and employee contracts. Obviously, this all varies state to state though.
Good points @johnkearnsagency for sure, I just thought I would add a little * next to the "own" statement.
I do not have a issue with who legally owns the expirations, be it a franchisor, a cluster, an agency group, a network, an aggregator, a wholesaler, etc.
Many times joining a cluster, agency group, or a network you do not own the expirations anyways and sits under that master agency code. I would rather find an organization, that provides me carrier options to write a lot of business. I want a good out, if I need it and I'm fine with selling it at 1.5x the contract value to the franchisor or 2x the rate to an outside buyer, who's interested in joining the franchisor. So what if they need to be approved before buying. It's part of the process. I want to be able to have family rights, if I want to gift it to a relative as well. I want to build a legacy for myself and family. The economic interest is way more important then the expirations.
Your percentages % make sense but make sure they are real. My experience says Carriers paying groups higher commissions have rates that suck and you may then be placing your accounts with the 'average' commission players.
After you bust your ass for 10 years and have a book over a couple million, just think of the renewal income difference of 80 or 90 % vs. 50% .
Just curious... when you say contract value, do you mean 1.5 times renewal commission? Lets assume... so let's break that down. 50% times 1.5 is 75% right? ... if I were actively accepting agencies in your area I'd give that deal all day long... now the whole service aspect makes a lot more sense to me knowing where you are at given staff expenses being very different than somewhere in rural Nebraska. (ABSOLUTELY no offense to people or CSRs from Nebraska meant.)
Is having a 2 year non-compete a good out?
And you might want to check the company’s FDD’s. Pretty sure there are fees associated with transferring your book of business.
Very true! Worth looking into more.
Thanks for that. I’ll ask.
Do they require you to open a store front up front or are you able to work it from your home office?
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