Mar 24, 2019
Yes, 1.5 times the renewal value.
With Brightway it depends on which option you start with as to if you start with a retail space or from home.
With Goosehead, they want you to have an office location, be it in a set up like Regus.
Serious question- why not find a local independent agency to go to work for? Most will pay 40-50% of commission and no overhead. Seems like a no brainier to me??
I connected with the Goosehead rep and he says they rely on referals from loan originators. I'm sure it works to some degree, but I'm dubious
I found this interesting because when I did my walk through with SF reps, nearly all of them were spending heavy on internet leads to grow. Their "negotiated" rate was $12-15/ lead, but some were getting them down to a few dollars and one even found a way to get leads for a buck. Most of these were garbage, but they offset this with volume- ring the phone enough times and they'd get 3-8% attach rate.
It sounds like you've been doing this for a little while and have experience with poking at other methods for carrier access. The 25k up front seems like a lot to put down to get a renewal split that is pretty weak. Now maybe GH earns it with the admin portion, but I don't know enough to know better.
Another thing I'm vague on, is IF you sell, does the buyer have to pay another 25k to pick up your book? That'd be a sticking point. I read somewhere that Brightway has a hefty fee for this. It didn't sound like GH had that, but I was not specific when chatting with their rep.
The question for any of us is---in 5 years what would cause you to want to leave it and what would you leave it for?
What I like about the GH model is
Access to a lot of carriers on day 1.
Ability to write business polices.
No pressure to spend on marketing (or so it seems)
No pressure to sell bad products
Pretty loose with the storefront requirement
Exit is better than a SF or other captive options
No sales lead coming in and telling you how to run your ship.
Agency software (presuming you do close to no work on the renewals or other servicing)
E&O is part of the monthly fee
What I don't like about the model
25k for the weak renewal rate.
In checking the west coast map, I saw 2 of the GH offices in Wash, none in OR, and a ton down in California.
Is there a trade show or conf for people in our position to network and explore this stuff? Not that I need a reason to boondoggle to vegas, but it'd be worth it when considering chunking down between 10-100k of your own money for what could end up being a "job".
I'm going to be up front and tell you we do business in Washington so my opinion is not completely unbiased. That said I will give you as fair an assessment...
No quotas: This may be because you are a branch agency of GH, meaning, the stress of the quota falls on the agency brass versus their branch managers. The alternative would be having your own agency name/relationship with the carrier and direct underwriting access as you, not as an employee (or as they say, agency owner).
Access to a lot of carriers on day 1: This is true for most groups
Ability to write business polices: This is a great feature, one I firmly believe in and I think this is great!
No pressure to spend on marketing (or so it seems): MMMMmmmm not sure about this... now there likely isn't a mandated marketing push, but you'll still want to market regardless of your affiliation
No pressure to sell bad products: ALWAYS sell the right fit for your customers' needs, being indy gives you that freedom, this is good.
Pretty loose with the storefront requirement: The modern insurance companies are going cloud-based, why shouldn't agencies if they choose. Again, I agree with this flexibility.
Exit is better than a SF or other captive options: Is it? I would rather have 1X of 80% than 1.5X of 50%... Even more, I like an exit where I do have the option to sell, with no restrictions.
No sales lead coming in and telling you how to run your ship: You should really think about this one. You would be a representative of a large publicly held company. Make no mistake, you aren't the captain of the ship.
Agency software (presuming you do close to no work on the renewals or other servicing): It's great this is included for uniformity.
E&O is part of the monthly fee: Honestly, you shouldn't need to pay E&O because you are at a branch level in reality. This feels like a way to unnecessarily cost share or monetize the E&O.
The devil is in the details, read the contracts thoroughly and call the agency principals directly. If you do a good bit of due diligence you'll find your fit, and there is NO one size fits all approach. You all are doing one of the wisest things you can in researching online and with real agents and owners. I wish you the best!
BadTrout--- do you represent some other franchise, group, or cluster?
Andy, Yes I absolutely do own an agency and an agency network that I founded, so I think that's what gives me a unique perspective as to what to look for in a contract... I've picked them apart and written them from word one.
There are some things every group gets right, and there is usually stumbling blocks in every agreement. The company I founded is going to be a great fit for some agencies, and others maybe not, there are many variables. I think a good long comparison of the contracts, when looking at each point made in the forums like this will allow people to get an idea of what they are looking for in a group. It's disheartening for me to read some contracts people have signed and really don't have a full perspective of what they just got themselves into, so I come here to assist, to consult and give a little back to an industry that's been good to me. I have always been happy to weigh options with people looking to build something for themselves, even if I am not one of the options on the table. I try to be as upfront with that as possible, hence the disclaimer on my opinion piece above where I state my opinion is slightly biased, although I try to give good general advice.
So to answer your question... Yep, I do own one, but I am not here representing it any more than the little blurb under my signature.
Do not quote me, because I'm not sure, but from what I can tell many of the Brightway and Goosehead franchise owners aren't forking out tons of money for on-line leads. I know they train you in their methods for marketing such as real estate and mortgage brokers, but I'm pretty sure the 50/50 for renewal split on business is not just for servicing. I watched one video with a Brightway franchise owner mentioning that they got 50 leads in one month sent to them from the company's web site. Both companies want there franchise owners to be happy. I hope to learn more about this on my day of discovery with the company I select to go with. If they help drive business to you, along with all the methods they teach you, then I think the 25K to 60K is worth it.
Webinar: What it's like to be a Brightway franchisee
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