In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Brightway Insurance franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Brightway Insurance franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Brightway Insurance outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Brightway Insurance franchise opportunity

Section V – Presentation and analysis of Brightway Insurance’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 annualized premium (i.e., the amount of premium customers pay for policies in one year) for the 125 Agency Owners operating the 141 Included Retail Agency Locations for the 2023 calendar year, and the 125 Agency Owners operating the 125 Included Office Agency Locations for the 2023 calendar year

• 2023 average number of new business policies and new business annualized premiums generated by 407 Producers (308 Retail Agency Producers and 99 Office Agency Producers) of the 133 Retail Agencies, 74 Office Agencies, and 15 Office Agency Standard locations that commenced operations and received commissions by December 31, 2022, were open and operating for the entire 2023 calendar year, and which employed at least one full-time Producer during calendar year 2023

• average and median number of new business policies sold annually and number of Producers for certain Retail Agency Locations and Office Agency Locations during their first and second years of operations

• average annual commissions paid to Retail Agency Locations during the calendar years ranging from 2013 to 2023, after taking into account the percentage of commissions retained by Brightway Insurance, by tenure (1 to 5+ years)

• 2023 average, median, highest, lowest revenue for 70 of the Included Retail Agency Locations that were open for 5 full years as of December 31, 2023 and met Brightway’s then-current staffing requirements

Section VI – Key ratios, comparables, computations, and analyses for the Brightway Insurance franchise opportunity (exclusive content for Platinum subscribers)

Section I – Brightway Insurance Franchise Costs

• Initial Fee:  $25,000 to $50,000
• Lease Deposit and First Month’s Rent:  $0 to $5,000
• Leasehold Improvements:  $0 to $10,000
• Furniture, Furnishings, and Fixtures:  $0 to $7,000
• Equipment:  $1,600 to $6,000
• Signage:  $4,500 to $12,500
• Professional Fees:  $600 to $3,500
• Insurance Policies:  $2,300 to $5,000
• Licensing Fees:  $0 to $1,000
• Opening Advertising Expense:  $0 to $4,500
• Additional Funds – 6 Months:  $23,000 to $55,000
• Total Estimated Brightway Insurance Franchise Costs:  $56,900 to $159,500

Section II – Brightway Insurance’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  Retail Agency: $50,000 if paid in lump sum, or $65,068 if a portion is financed by Brightway Insurance; Office Agency: $30,000 if paid in lump sum, or $39,030 if a portion is financed by Brightway Insurance

• Baseline Sales Commissions Retained – New Business:  Retail Agency: 15% of Brightway Sales Commissions on New Business (you retain the remaining 85%); Office Agency: 20% of Brightway Sales Commissions on New Business (you retain the remaining 80%)

• Sales Commissions Retained – Renewal Business:  Retail Agency: 45% of Brightway Sales Commissions on Renewal Business (you retain the remaining 55%); Office Agency: 50% of Brightway Sales Commissions on Renewal Business (you retain the remaining 50%)

• Other Advertising and Marketing Programs; Cooperative Advertising:  reasonable cost

Section III – Number of Franchised and Company-Owned Brightway Insurance Outlets

Franchised

2021

• Outlets at the Start of the Year:  239
• Outlets at the End of the Year:  287
• Net Change:  +48

2022

• Outlets at the Start of the Year:  287
• Outlets at the End of the Year:  285
• Net Change:  -2

2023

• Outlets at the Start of the Year:  285
• Outlets at the End of the Year:  333
• Net Change:  +48

Company-Owned

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  2
• Net Change:  +1

2022

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2023

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section IV – News Updates on the Brightway Insurance Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Brightway Insurance Franchise (Item 19, 2024 FDD)

• As of December 31, 2023, Brightway Insurance had 333 franchised Brightway Locations. The agency level data presented below sets forth the financial performance of certain subsets of these franchised Brightway Locations.

Part 1 – Summary of Annualized Premium by Agency Owner (2023)

• Part 1 provides a snapshot of the size of the book of business associated with each of the Included Retail Agency Locations and Included Office Agency Locations, which is a commonly-referenced metric used in the insurance industry to determine agency size.

• 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.

A. Annualized Premium for Calendar Year Ending December 31, 2023

• The information presented below shows the Annualized Premium of the 125 Agency Owners operating the 141 Included Retail Agency Locations for the 2023 calendar year. The 141 Included Retail Agency Locations in Part 1 were open for more than 12 months as of December 31, 2023.

• The Annualized Premium of Brightway’s multi-unit owners are combined because the multi-unit owners are permitted to share business across their locations, and the number of multi-unit owners in each subset are shown below.

Over $25M

• Number of Agency Owners:  7
• Number of Multi-Unit Location Owners:  4
• Number of Locations:  12

Between $15M and $25M

• Number of Agency Owners:  13
• Number of Multi-Unit Location Owners:  5
• Number of Locations:  19

Between $10M and $15M

• Number of Agency Owners:  14
• Number of Multi-Unit Location Owners:  2
• Number of Locations:  16

Between $8M and $10M

• Number of Agency Owners:  9
• Number of Multi-Unit Location Owners:  0
• Number of Locations:  9

Between $6M and $8M

• Number of Agency Owners:  15
• Number of Multi-Unit Location Owners:  0
• Number of Locations:  15

Between $4M and $6M

• Number of Agency Owners:  20
• Number of Multi-Unit Location Owners:  2
• Number of Locations:  22

Between $3M and $4M

• Number of Agency Owners:  8
• Number of Multi-Unit Location Owners:  0
• Number of Locations:  8

Between $2M and $3M

• Number of Agency Owners:  15
• Number of Multi-Unit Location Owners:  1
• Number of Locations:  16

Between $1M and $2M

• Number of Agency Owners:  11
• Number of Multi-Unit Location Owners:  0
• Number of Locations:  11

Under $1M

• Number of Agency Owners:  13
• Number of Multi-Unit Location Owners:  0
• Number of Locations:  13

B. Office Agency Annualized Premium for Calendar Year Ending December 31, 2023

• The information presented immediately below shows the Annualized Premium of the 125 Agency Owners operating the Included Office Agency Locations for the 2023 calendar year. The 125 Included Office Agency Locations in Part 1 were open for more than 12 months as of December 31, 2023. As set forth above, the Included Office Agency Locations excludes 17 Office Agencies that converted to that model and were previously operated as Retail Agency and 1 Office Agency that was previously operated as an Office Agency Standard.

• None of the Included Office Agency Locations were multi-unit owners during the disclosure period.

Over $2M

• Number of Agency Owners and Locations:  3
• Number of Locations Operating Less Than 2 Years:  0

$1M to $2M

• Number of Agency Owners and Locations:  13
• Number of Locations Operating Less Than 2 Years:  8

$500K to $1M

• Number of Agency Owners and Locations:  19
• Number of Locations Operating Less Than 2 Years:  10

$200K to $500K

• Number of Agency Owners and Locations:  26
• Number of Locations Operating Less Than 2 Years:  26

$100K to $200K

• Number of Agency Owners and Locations:  20
• Number of Locations Operating Less Than 2 Years:  19

Under $100K

• Number of Agency Owners and Locations:  44
• Number of Locations Operating Less Than 2 Years:  44

Part 2 – New Business Policy Production by Producer (2023)

• Part 2 profiles the number of New Business policies and New Business Annualized Premiums generated by Producers of 133 Retail Agencies, 74 Office Agencies, and 15 Office Agency Standard locations that commenced operations and received commissions by December 31, 2022, were open and operating for the entire 2023 calendar year, and which employed at least one full-time Producer during calendar year 2023, defined as a Producer who was associated with the agency for the entire 2023 calendar year and sold a minimum of 50 policies in 2023.

• Unlike Part 1 above, Part 2 does not exclude (i) any Producers who worked for Brightway Locations that converted model types during their tenure, and (ii) any data for Office Agency Standard locations, because Part 2 does not present agency-level data.

• For the purposes of Item 19, “Producer” is defined as an individual who sells property and casualty insurance in Brightway Locations, including owners.

• New Business Annualized Premium is defined as the amount of premium customers pay for a new policy in one year; if a policy is issued in a six-month term, the premium amount is doubled.

• Included in Part 2 are 407 Producers who owned or were employed by the subset of Brightway Locations described above. Part 2 excludes any Producers who did not sell a minimum of 50 policies in 2023, in order to include only those individuals who have New Business production as a meaningful part of their jobs.

Average

• New Business Policies Sold Per Producer in 2023:  266
• New Business Annualized Premiums Per Producer:  $457,191
• Number of Producers:  407 (308 Retail Agency Producers, 99 Office Agency Producers)

Part 3 – New Business Production by Agency (2023)

• Part 3 of this Item sets forth the number of New Business policies sold by certain Brightway Locations during their first and second years of operations.

• Part 3 shows information for those Brightway Locations that opened after January 1, 2020, did not convert model types, have at least one full year of operations as of the issuance date of the Disclosure Document, and remain open as of the issuance date of the Disclosure Document.

• In Part 3, each “Office Count” represents performance data for an Included Location during one 12-month period of operations. Depending on the opening date of the Included Location, either one or two years of performance data for each Included Office is represented in the table below.

New Business Production by Agency and Tenure – Included Locations

Year 1

• Average New Business Policies Sold Annually:  135
• Median New Business Policies Sold Annually:  106
• Average Number of Producers:  1
• Median Number of Producers:  1

Year 2

• Average New Business Policies Sold Annually:  240
• Median New Business Policies Sold Annually:  144
• Average Number of Producers:  1
• Median Number of Producers:  1

Year 3

• Average New Business Policies Sold Annually:  304
• Median New Business Policies Sold Annually:  224
• Average Number of Producers:  1
• Median Number of Producers:  1

Part 4 – Annual Commissions Paid to Retail Agencies by Location (2013-2023)

• The information below reflects average commissions earned by Retail Agencies with at least one full calendar year of operations, grouped by tenure.

• Amounts shown are the commissions paid to Agency Owners during the calendar years ranging from 2013 to 2023, after taking into account the percentage of commissions retained by Brightway.

• Brightway Insurance has not been offering Office Agencies for five years. Accordingly, no Office Agencies are included in the data set forth in Part 4.

• “Tenure” is defined as the number of 12-month periods, or Tenure years, in which a Retail Agency received commissions.

• For all information presented in this Part 4, Tenure reflects full calendar years of business. Brightway Insurance does this to account for the ramp-up when a Brightway Location first commences operation and to normalize results. Therefore, if a store opened in July, that Location’s first full year starts in January of the following year.

• All Retail Agencies included in this chart had at least one full calendar year of operations on or before December 31, 2023, regardless of operational status as of that date.

Average

• Tenure – 1 Year:  $63,887
• Tenure – 2 Years:  $112,919
• Tenure – 3 Years:  $153,370
• Tenure – 4 Years:  $196,350
• Tenure: – 5+ Years:  $394,969

Part 5 – Revenue of Established Brightway Locations (2023)

• Part 5 of this Item sets forth agency revenue information for established Brightway Locations. Included in Part 5 are 70 of the Included Retail Agency Locations that were open for five full years as of December 31, 2023 and meet Brightway’s then-current staffing requirements.

• The primary purpose of Part 5 is to show the revenue of mature, tenured Brightway Locations that have been in business five years or more.

2023

• Average Revenue Top 25%:  $1,280,570
• Average Revenue:  $651,362
• Average Revenue Bottom 25%:  $261,150
• Median Revenue:  $504,122
• High Revenue:  $2,708,190
• Low Revenue:  $124,765

Section VI – Brightway Insurance Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️