Updated October 24, 2021.
If you are considering a Goosehead Insurance franchise, don’t get blindsided by these 17 important franchise fees (from the initial franchise fee, to the royalty fee, to 15 other fees found in Items 5 and 6 of Goosehead Insurance’s 2021 FDD).
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 in which the Franchised Business is located.
- 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 in full prior to beginning the initial training program in which case you will receive a $20,000 discount. Second, you may elect to pay $10,000 prior to beginning the initial training program and 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 in full prior to beginning the initial training program in which case you will receive a $15,000 discount. Second, you may elect to pay $10,000 prior to beginning the initial training program and 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.
- 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).
- Goosehead Insurance reserves the right to require you to procure such policies from provider(s) it designates as part of a System-wide insurance program it implements. If Goosehead Insurance does not designate such provider(s), such policy or policies must be written by an insurance company or companies Goosehead Insurance has approved.
- 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 $2,000 and $5,000, depending on the types of insurance coverage you purchase through TWG and your coverage amounts.
- Any fees paid for insurance coverage purchased through TWG are fully-earned upon receipt and are non-refundable.
3. Royalty Fee: 20% of Gross Revenues on policies in their initial term and 50% of Gross Revenues on policies in their renewal terms, subject to the Minimum Royalty
4. Marketing Contribution: up to 2% of Gross Revenues
- Due Date: Same as Royalty Fee, on demand.
5. Transfer Fee: $5,000 to $40,000
- Due Date: At time of transfer.
6. Audit Fee: 2% interest per month on unpaid amount and Goosehead Insurance’s cost of audit
- Due Date: On demand, after audit.
7. Taxes: amount required to reimburse Goosehead Insurance for certain taxes imposed on payments to it
- Due Date: On demand.
8. Interest on Overdue Payments: 18% per year on underpayment
- Due Date: On demand.
- 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
- Due Date: On demand.
10. Inspection Fee: Goosehead Insurance’s costs and expenses of correcting uncured deficiencies from inspections
- Due Date: On demand, after inspection.
11. Costs and Attorneys’ Fees: will vary under circumstances
- Due Date: Upon demand.
- Only 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.
- 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.
12. Securities Offering Fee: $10,000 or Goosehead Insurance’s actual expenses, whichever is greater
- Due Date: Upon demand.
- Only due if you engage in a securities offering.
- 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.
13. Replacement and Additional Training: up to $400 per day
- Due Date: Upon receipt of additional training, if applicable.
14. Insurance: $2,000 to $5,000
- Due Date: On demand.
15. Technology Fee: $440 for the first user and $305 for each additional user
- Due Date: Monthly.
16. Book of Business Valuations: $1,000 per valuation
- Due Date: On demand, before valuation.
17. Relocation Fee: $500
- Due Date: At the time you request relocation of the Franchised Business.
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