In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Brightway Insurance franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Brightway Insurance franchise, based on Item 7 of the company’s 2018 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Brightway Insurance franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Brightway Insurance outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Brightway Insurance’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 annualized premiums (amount of premium customers pay for policies in one year) for the 121 Brightway Stores that have commenced operations and received commissions as of December 31, 2016 (the “Included Stores”)
- 2017 average new business policies sold per Producer and business annualized premiums per Producer for the 261 Producers (including Owners) who have been in the Brightway System for more than 12 months and who have sold a minimum of 50 policies in 2017
- 2017 average revenues, compensation expense, marketing expense, rent, other operating expenses, and pre-tax operating profit for the 56 Brightway Stores that had a tenure of 5 years or more as of December 31, 2017 (meaning that they were open at least 5 full calendar years as of December 31, 2017), and that reported their expenses to Brightway in response to a survey sent to all Brightway Stores
- 2017 annual Store commissions paid to Brightway, by store tenure (1 year, 2 years, 3 years, 4 years, 5+ years)
- 2017 average compensation expense (per employee), marketing expense, rent, and other operating expenses for 68 of the Included Stores who met certain criteria
- 2017 new business policies sold per Store and new business annualized premiums per Store for the 121 Brightway Stores that have been in the Brightway System for more than 12 months
- 2017 average revenue to Brightway (before the commission split) on a state‐by‐state basis for the respective types of Personal Lines New Business (auto and home) policies sold
- 2017 average, high, and low “cost of support” for the 121 Included Stores open more than 12 months, by Store tenure (1 year, 2 years, 3 years, 4 years, 5+ years). The “cost of support” is a number calculated to represent the average percent of commission withheld in the commission split (New: 85%/15%; Renewal: 55%/45%) and reflects a blend of new and renewal revenue paid to the 121 Included Stores open more than 12 months.
Section I – Background Information
14 Things You Need to Know About the Brightway Insurance Franchise
Changes Contract So Franchisees Can Now Own Multiple Stores
1. At the end of February 2018, Brightway Insurance announced that it was changing its franchise contract. When franchising started in 2008, Brightway Insurance offered its franchisees the opportunity to open one Brightway Insurance store. Ten years later, Brightway Insurance is now allowing franchisees to open additional Brightway Insurance stores for the same franchise fee of $60,000.
2. Michael Miller, co-founder and chairman of Brightway Insurance, said, “Our jobs are to help our franchisees achieve their potential through franchising with us. One way is through Multi-Unit Ownership, so we’ve made this change to make growing their enterprise easier. This is a win-win. It empowers our franchisees to own multiple stores, helping them be even more successful and it helps to build the Brightway brand even faster.”
3. As a result of the contract change, Josh Hite, owner of Brightway Insurance Agencies in Boynton Beach, Florida and Bluffton, South Carolina, opened a third agency in Lake Worth, Florida in July. This makes Hite the first Brightway franchisee to own three locations. Hite opened his first Brightway Insurance store in Boynton Beach in 2015. Two years later, he teamed up with Gregory Dissel, who had worked at the Boynton Beach office for five years, to open the first Brightway Insurance agency in South Carolina. Hite’s agency is among the top 10 in sales in the Brightway system.
4. Talman Howard, president of Brightway Insurance, said, “Josh Hite is our first Multi-Unit Owner to own three stores, and we’re excited to see him grow his enterprise through Brightway. Not only does he care about his customers, but also he’s empowering his team to realize their dreams and reach their potential as Brightway Agency Owners.”
Reaches $500 Million in Annualized Written Premium
5. Brightway Insurance began 2018 on a high note as the company ended the previous year by hitting a major milestone. The company announced that it had reached $500 million in annualized written premium, growing more than 12 percent in 2017. To further illustrate how far the company has come since it first started franchising in 2008, Brightway Insurance said that the company finished that year with $38 million in premium.
6. Michael Miller, co-founder and chairman of Brightway Insurance, said, “Our business results exceed our wildest dreams. The results are a testament to what can be done when you build a business where all interests are aligned. Everything we do is designed to benefit our customers and franchisees. We won’t do anything that doesn’t have a win in it for each of those stakeholders. When you do that, you don’t need to convince anyone to do anything – they do the right things because it is always in their best interests.”
7. Brightway announced that it had crossed the half a billion dollar mark at its annual Kick-off Meeting, its once-a-year networking and training event held this year on January 19-20, at the Hilton Bonnet Creek Resort in Orlando, Florida. The company also highlighted some of its other achievements in 2017, including:
- Expanding into eight new states, bringing the number of states in which it has franchises to 19.
- Growing the number of people in the Brightway system by 6 percent to 765.
- Growing policies in force by 12 percent to more than 334,000.
Delivers Disaster Preparedness Kits to Students in Jacksonville, Florida
8. Toward the end of August, as Brightway Insurance was celebrating its 10th anniversary, employees decided that the best way to celebrate would be to give back to the local community. Brightway’s employees visited Hogan-Spring Glen Elementary School in Jacksonville, Florida to deliver disaster preparedness kits and a message to students of being ready at home for a disaster. Employees donated 240 kits, which they assembled during Brightway’s anniversary celebration on August 20.
9. Bianca Soto, a Team Lead in Brightway’s Service Center who spearheads the company’s annual charitable campaign through the United Way, said, “Giving back is a big part of Brightway’s culture, and creating disaster kits for local children was a natural fit considering our business is all about helping people prepare for catastrophic events. We had a lot of fun talking with the students at Hogan-Spring Glen Elementary about being ready for a hurricane, fire and other types of events, and they were thrilled to receive their very own kits.”
10. Brightway coordinated the disaster kits through the local United Way. Employees packed each kit with a first aid kit, blanket, hand sanitizer, AAA batteries, tissues, activity pad and colored pencils, flashlight, glow stick, whistle, water bottle, snack, and poncho.
11. Jenny O’Donnell, manager for volunteerism for the United Way of Northeast Florida, said, “The disaster kits for kids project is one of my favorite projects. It’s really important to educate kids on an all-hazards approach to disaster preparedness. We work with the children because they’re going to go home and talk about what they learned today and share their disaster kits with their families, making it more likely that families have a disaster kit and a communication plan in place at the time of a disaster. It’s not just for hurricanes, but for floods, fires or other disasters that happen.”
12. Brightway Insurance was founded in 2003 when brothers David Miller and Michael Miller purchased Jennings Insurance Agency, which had one office and three employees. The Millers formed the Miller Insurance Group, which would later become Brightway Insurance in 2007. That same year, Brightway Insurance became a registered franchise and started opening locations in Florida the following year. Within two years, Brightway Insurance earned over $100 million in sales.
13. In 2011, Brightway Insurance opened its first franchise location outside of Florida in Atlanta, Georgia. Since then, Brightway Insurance has continued to grow across the United States.
Entrepreneur’s Franchise 500
14. Brightway Insurance ranked No. 199 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Brightway Insurance franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Brightway Insurance’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 115
- Outlets at the End of the Year: 116
- Net Change: +1
- Outlets at the Start of the Year: 116
- Outlets at the End of the Year: 134
- Net Change: +18
- Outlets at the Start of the Year: 134
- Outlets at the End of the Year: 152
- Net Change: +18
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 2
- Net Change: +1
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 2
- Net Change: 0
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 1
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
- As of December 31, 2017, Brightway Insurance had 152 franchised Brightway Stores. The data presented in the tables below sets forth the financial performance of certain subsets of the 121 Brightway Stores that have commenced operations and received commissions as of December 31, 2016 (the “Included Stores”). There are 121 Included Stores in Item 19.
- In Item 19, Brightway Insurance excluded from Included Stores the 1 Brightway‐owned store and 3 Associate Agency Owners (AAOs) not on Brightway’s standard Franchise Agreement.
Part 1 – Summary of Current Annualized Premium by Store (2017)
- The information presented below shows the Annualized Premium of 121 of the Included Stores for the calendar year ending December 31, 2017.
- The 121 Included Stores in Part 1 were open for more than 12 months as of December 31, 2017.
- Of those 121 Stores, 54% have books of business larger than $3 million in Annualized Premium.
- Annualized Premium is defined as the amount of premium customers pay for policies in one year; if a policy is issued in a six‐month term, the premium amount is doubled.