Do you want to open an insurance agency business by buying Goosehead franchise? If YES, here is how much it cost to open a Goosehead insurance franchise successfully. If you are looking towards opening a Goosehead Insurance Franchise, it will be nice for you to have a of what the company represents before going ahead to enquire about the cost of opening the franchise in your location.
The Goosehead model empowers agents to drive high volume of quality leads at a fraction of the client acquisition cost. Their service teams handle all support functions, so franchisees can concentrate on building their books while delivering an outstanding client experience. As of the 2018 Franchise Disclosure Document, there are 292 franchised Goosehead Insurance locations in the USA.
Financial Investment Required to Open a Goosehead Insurance Franchise
Goosehead Insurance has a franchise fee of up to $60,000, with a total initial investment range of $60,000 to $128,000. Here are areas where you are expected to spend money and the cost associated with it;
1. Initial Franchise Fee: $25,000 to $60,000
For a single franchise, the Initial Franchise Fee will range between $25,000 and $60,000, depending on the geographic region the franchised business will be located in. If your franchise will be operated in Louisiana, Oklahoma, or Texas, then the Initial Franchise Fee is $60,000. This may be paid in one of two ways.
First, you may elect to pay your Initial Franchise Fee at signing in which case you will receive a $20,000 discount. Second, you may elect to pay $10,000 at signing. The remaining $50,000 balance will be paid in monthly installments of $833.33 beginning on the first day of the sixth month after training, according to the terms of the promissory note attached to the Franchise Agreement as Exhibit F (the “Promissory Note”).
If your franchise will be operated in a state outside of Louisiana, Oklahoma, or Texas, then the Initial Franchise Fee is $40,000. This may be paid in one of two ways. First, you may elect to pay your Initial Franchise Fee at signing in which case you will receive a $15,000 discount.
Second, you may elect to pay $10,000 at signing. The remaining $30,000 balance will be paid in monthly installments of $500 beginning on the first day of the sixth month after training, according to the terms of the Promissory Note.
Please note that the Initial Franchise Fee is uniformly applied. The Initial Franchise Fee is fully-earned upon receipt and, once you or any of your personnel begin(s) the initial training program, the Initial Franchise Fee becomes non-refundable in consideration of administrative and other expenses that Goosehead Insurance incurs in providing you with training, carrier appointments, and pre-opening assistance as part of the initial launch of the Franchised Business.
2. Insurance: $1,500 to $6,000
You must purchase Commercial General Liability Insurance, Property Insurance, and Professional Liability (Errors & Omissions) Insurance. You must also purchase the following types of insurance if applicable: Business Automobile Liability Insurance (if your agency owns a vehicle), Employer’s Liability and Worker’s Compensation Insurance (if you hire an employee), Umbrella Liability Insurance (if you write commercial insurance), and Cyber Risk Insurance (if a group policy is not available through Goosehead).
You may purchase some or all of these through TWG or from any approved carrier. Goosehead Insurance may require you to obtain additional insurance in the future. If you purchase some or all of your required insurance through TWG, your payment for the first year of coverage will be due to Goosehead Insurance before you open.
Your total cost for premium payments for the first year will be between $1,500 and $6,000, depending on the types of insurance coverage you purchase through TWG and your coverage amounts. Please note that any fees paid for insurance coverage purchased through TWG are fully-earned upon receipt and are non-refundable.
3. Royalty Fee: 20 percent of Gross Revenues on policies in their initial term and 50 percent of Gross Revenues on policies in their renewal terms, subject to the Minimum Royalty
4. Marketing Contribution: Up to 2 percent of Gross Revenues and the due date for this fee is same as Royalty Fee, on demand.
5. Transfer Fee: 15 percent to 100 percent of the Initial Franchise Fee and the Due Date for this fee At time of transfer.
6. Audit Fee: 2 percent interest per month on unpaid amount and Goosehead Insurance’s cost of audit and the Due Date for this fee is On demand, after audit.
7. Taxes: Amount required to reimburse Goosehead Insurance for certain taxes imposed on payments to it and the Due Date for this fee On demand.
8. Interest on Overdue Payments: 18 percent per year on underpayment and the Due Date for this fee On demand.
Please note that only due if there are any past due payments to Goosehead Insurance, measured from the date the payment was originally due until it was actually paid.
9. Product Evaluation Fee: The reasonable cost of inspection, as well as the actual cost of the test and the Due Date for this fee On demand.
10. Inspection Fee: Goosehead Insurance’s costs and expenses of correcting uncured deficiencies from inspections and the Due Date for this fee On demand, after inspection.
11. Costs and Attorneys’ Fees: This fee will vary under circumstances and the Due Date for this fee for this fee is upon demand.
This is due if you default under the Franchise Agreement. You must reimburse Goosehead Insurance for its expenses (including reasonable attorneys’ fees) in enforcing or terminating the Franchise Agreement. So also, if you enter into a Promissory Note and Goosehead Insurance brings an action to enforce payment, you must reimburse its reasonable attorneys’ fees and costs.
- Securities Offering Fee: $10,000 or Goosehead Insurance’s actual expenses, whichever is greater and the Due Date for this fee is upon demand.
Please note that this is only due if you engage in a securities offering.
So also, you must reimburse Goosehead Insurance for its reasonable costs and expenses (including legal and accounting fees) to evaluate your proposed offering and you also must indemnify Goosehead Insurance.
- Replacement and Additional Training: Up to $400 per day and the Due Date for this fee IS Upon receipt of additional training, if applicable.
- Insurance: $2,000 to $5,000 and the Due Date for this fee is on demand.
- Technology Fee: $350 for the first user and $275 for each additional user and the Due Date for this fee is Monthly.
- Book of Business Valuations: $1,000 per valuation and the Due Date for this fee is on demand, before valuation.
- Relocation Fee: $500 and the Due Date for this fee is upon request.
Due Date: At the time you request relocation of the Franchised Business.
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