What Do You Think About Insurance Franchises?

[ucf3arb]

i recently been looking in to an insurance franchise. i am a recent college graduate and want to enter this industry. I have exceptional sales experience and business management from past jobs and business i owned and operated.
What my question was what do you guys think about companies such as Fiesta Auto insurance whom are franchise insurance agencies. i am planning on getting my licensing soon to become and insurance agent. but i am a competitive person and always want to be the best what else do i need to succeed and move beyond the independent agent to maximize my profit and status in this industry? don't forget my original question about franchise insurance, i think this could be done more independently with out a franchise.

thanks

 

[FLInsa]

1. Get a spell check software.

2. Start using proper grammar.

3. You've to be very careful about joining a franchise. They offer pros and cons but the cons, IMHO, outweigh the pros. For the most part, you are not in "charge". Just like captives, you have to follow their model. Conclusion: if you are looking for true independence, look the other way.

Good luck.

 

[arnguy]

FLInsa, I think you are expecting too much from a college graduate.

 

[Yoda]

What my question was what do you guys think about companies such as Fiesta Auto insurance whom are franchise insurance agencies.

Alright heres the problem with Fiesta. I never ever really heard of them until I saw their ad in INC magazine and a couple of other magazines. The whole reason to pay franchise fees and hook up with a franchise is name recognition. I dont think people are going to recognize Fiesta Insurance. They dont have any national advertising programs like Sub Way or McDonalds. I dont like it one bit! Maybe you put one of them up on the mexican side of town they might feel more comfortable coming into it. Of course as a rule Ive found mexicans dont particularly like buying insurance. Who knows.... I think Fiesta is a real stinker of an idea!

 

[Evo0724]

Not to mention the $10 G Franchise Fee to start off,but its tempting
with their business model and success track of individual franchisers
popping up another location after theyve only been in business1 year or less,too bad I dont have 10 Gs extra otherwise Id be all over it.

 

[ucf3arb]

As you mentioned the initial investment is only 10g's and the most i would loose as an investment would be a little over this. But i am assuming it would be a good way to begin a career in the insurance industry for such a small investment. They start you off with 52 insurance carriers here in the state of Florida and you do tax refunds at the same time. I am sure their is a better way but with no prior experience as an insurance agent.
Evo0724 you made a clear point they have no proven model for success though they have opened many offices recently.
FLInsa-- i am an analytical guy so grammar never was something i have worried about throughout my life. but thanks for your advice

 

[Mark]

Don't do it. You can spend $10,000 a lot of better ways in getting started in the INS business.

 

[djs]

The reason to buy a franchise is for the business systems. Name recognition is a distant second to this.

The business systems is the process of how they do things that will ultimately make you successful (or not). For instance, most people coming into insurance don't have the foggiest clue on how to market, or how to service customers, or how to get appointments to carriers, how to hire staff, how to set up the IT in the office, how to quote, what is required to bind, etc.

A franchise should help with all of this.

Because of this, unless someone here has opened a Fiesta Franchise, they probably can't give much advice. Most individuals here are independent and don't want to look twice at something that offers structure. Structure isn't all bad, but if you are good at it yourself, then you may not need a franchise / imposed structure system.

You need to talk to some of their franchisees to see how good the support is AFTER the doors are open. That's what you are paying for.

In a nutshell, my guess is they are basically just another GA trying to make a buck off of your work (not all bad, if they offer the support).

The real question is whether the franchise agreement gives you access to other carriers (outside of Fiesta carriers) AND that you own the business with your clients. If I was paying a franchise fee, I would not want a first right of refusal type of agreement.

I would be very careful about what you are at risk for. There was another P&C franchise thing a few years ago that ended up going belly up.

My guess is you'll have to lease office space in a retail area, which will cost some $$$$ and you'll be on a lease. When you start, you have no income coming in and with P&C, it can take a few years (yes, years) to build a reasonable, reliable income that will offset the money going out the door, especially if expenses can't be very tighly controlled.

Dan

 

[Crabcake Johnny]

The most you can lose is 10K? I might be wrong but you still need to get an office, which means signing a lease, furnishing it and possibly hiring staff. The most you can lose is well over 10K.

 

[arnguy]

Not much!