Considering purchase/franchise

[JD]

I am considering purchasing an agency that Brooke Financial is buying. as you may know, they sell these on a franchise basis. Has anyone had experience, good or bad, with these people. How restrictive are they and how much control do they exert on the operations, contracts, appointments etc. The costs seem pretty stiff, but the split is 85/15. Better than 35/65 that I currently have.

I have a lot of experience in the business, but limited experience in the managing and operating the day to day business of an agency. I do know that I am tired of cuts in commission and more and more service responsibility while the agency gets more of what I bring in.

Any response will be welcome.

[mhutch69]

I can tell you from speaking to numerous existing Brooke franchises and/or franchisees which have "walked away" from the operations, this is not an option you will want to pursue.

the financing is decent but the life with them after the fact changes anytime they choose and only to their liking. this is just what I have been told by existing franchisees.

Brooke sells the operations for 2 times the actual value and makes it impossible to actually make a profit. If they are ever able to require payment of their 15% franchise fee, most operators will need a net of 32% of gross revenues to make debt service and the fees. Simple math will tell you if this works. As well, Brooke receives all commissions and sends what little they desire to the franchisee. The contractual terms change often and only litigation can fix. they have money to fight and most franchisees do not.

Good luck.

[CATHIEA]

I can tell you that in AZ they bought up a lot of nonstandard agencies & sold them to unspecting folks for much more than they were worth. They also negotiate higher commission percentages from the carriers - but this is not passed down to the franchisees since the commission statements and checks are sent to them. If you are looking for a good working relationship and someone who is more interested in the agency success rather than their own gain contact the Leavitt Group.

[chuck]

I looked at a Leavitt franchise several years ago, I even went to one of their agent meetings. It looked like a great org. I contacted some of their ex-agents and could not find one who did not respect Leavitt or who said Levitt did not treat them well.

I have to be careful how I say this but my experience with the Brooke Agency I purchased was not pleasant.

[92builder]

I've been seriously looking at a Brooke franchise and hear a lot of GOOD things. Am I talking to the wrong ppl? I've tried to look at Leavitt but they don't write in Kansas. Do you think they'd make an exception and add my agency/state?

Someone pls give me a Brooke horror story.

[JD]

I don't have a horror story, but I have been considering an agency with Brooke. Looking through the book, it looks very controlling and restrictive
and the figures on the cash flow are constantly changing.

Makes me very wary about committing to that kind of a debt, but I tend to be too much of an optimist TOO!

[JD]

Is there anyone out there from the north midwest that might have any ideas on an agency franchise type of operation other than Brooke? Leavitt looks to be primarily in the west, and Brooke does not look to be appealing. Starting from scratch, due to a very restrictive non-compete is out of the question. Help!

[Brandy]

You could try the following link http://www.iiaa.org. As I understand it they have a person in each of the offices around the county who can help an agent get started with E&O and companies to write for. The commission is a little lower but if you don't have a book of business these large companies are hard if not impossible to a contract with to begin with.

Hope that helps.

[jctwindad]

Before making the jump to agency ownership, you need to know that a 35/65 split is not a bad deal. After working for other agencies for 20 years, I finally reached the ownership ranks 10 years ago, and now own 80% of a $20 million agency. I can tell you that my profit margin is 25% (which is really good among agencies) and most of that is going to pay for the stock I acquired, for the next 7-8 years. I have 6 producers who all are on a 35/65 split. If they took their book of business elsewhere, and hired a CSR, with benefits for Producer and CSR, payroll taxes, rent, phone, E & O insurance, etc. etc. the Producer would not have 35% left. Then every time the agency grows, and the profit margin gets better you find it necessary to hire another CSR, and there goes the profit margin. Most producers think the grass is always greener on the other side, and having been on both sides, I can tell you it is not as green as it appears. Only after years and years do most agencies reach the point where the "take home" is more than 35%.

[miinsguy]

You might want to look at SIAA. I looked at them but did not go that route.

http://www.siaa4u.net.

As someone else commented 65% comission payment is quite good.

[jctwindad]

I understood commission split to be 35% for the producer, and 65% for the agency. That is fairly standard. Occassionaly you will see a higher split for the producer on new business only, but 35/65 is fairly normal for renewal splits.

[nick]

I have been with SIAA since 1994
It works
send me an e-mail if you want an intro or more information

[PIA Jack]

One of the best ways to start an agency from scratch or grow an agency is with SIAA. They have been helping agents grow and prosper since 1983. I have helped more than 20 agencies in PA. Give the Master Agency in your area a call. Start at http://www.siaa4u.net Good luck!

[yoyowordup]

If you are a member of Big I, you also have access to Big I Markets which offers all kinds of personal and commercial lines products to offer your clients.

[keith]

We have agents throughout California that we give them 65% of the commission. They have access to all our Commercial and Personal lines markets. They submit Accord app to us through our website and we market it for them. We also handle renewals for them and give them 65% commission. We are completely paperless and don't have to provide locations (Brick & Mortar) which helps with our overhead. Another Franchisee is Iroquis Group.