Goosehead Insurance Agency

The franchisor has initiated 10 litigation cases over the past 3 years, significantly above the typical range of 0-2 cases. What are the primary reasons for these lawsuits, and what percentage involve disputes with franchisees versus other parties?

Your system lost 309 units over 3 years while reporting zero unit transfers. Can you explain why no franchisees successfully transferred their units, and what barriers exist to unit sales in the secondary market?

The termination rate of 8.4% exceeds typical ranges. What are the most common reasons franchisees are terminated, and how many of the 2023-2024 closures were franchisor-initiated terminations versus voluntary closures?

Median unit sales of $86,146 are 29% below typical range for this category. How many franchisees achieve profitability at this sales level after accounting for the 20% royalty, 2% ad fund, and $590 monthly technology fee?

The franchise and transfer fees of $50,000 each are significantly above typical ranges. What justification is provided for these premium fees, and are there any circumstances under which they could be negotiated or waived?

With 2 pending litigation cases and 13 total cases over 3 years, what is the current litigation exposure and settlement status of pending cases?

The contract provides for 9 renewal conditions. Can you detail all 9 conditions and confirm whether franchisees who meet them are guaranteed renewal, or if renewal remains discretionary?

Your non-exclusive territory model with no encroachment protection means other Goosehead franchisees can operate in the same area. How does the franchisor manage potential conflicts between franchisees, and are there any policies limiting the number of franchisees per geographic area?

The monthly technology fee of $590 is at the upper end of the industry range. What specific technology and services are included, and how frequently are new fees or increases implemented?

You require binding arbitration in Westlake, Texas, which may impose significant travel costs for franchisees in other states. What is the average cost and duration of arbitration cases filed against your franchisees, and do you waive any arbitration costs?

Overdue payments accrue interest at 24% annually. How frequently do you exercise this provision, and what payment difficulties have triggered these high interest charges in past disputes?

The 10-day cure period for payment defaults is quite short. Can you clarify the circumstances that would qualify for this short cure window versus the 30-day cure period for other defaults?

Only 3 types of defaults are curable, while 23 trigger immediate termination. Can you provide the full list of non-curable defaults to assess termination risk for common operational issues?

The non-compete restricts personal lines, auto, home, motorcycle, and RV insurance for 2 years within 25 miles. Are there any exceptions or variations to this restriction based on franchisee circumstances?

Financial Performance Item 19 indicates median sales of $86,146, but how many units reported this data, and what percentage of your franchise system is represented in this disclosure?

The system has declined 7.8% compounded annually over 3 years. What strategic changes or new initiatives is the franchisor implementing to stabilize or grow the system?

With 2 pending litigation cases, can you disclose whether these involve multiple franchisees or individual disputes, and what the general subject matter involves?

The contract allows the franchisor to set operational performance standards and approve all insurance suppliers. How restrictive are these standards in practice, and what percentage of franchisees fail to meet performance metrics annually?

Transfer fees of $50,000 combined with zero actual transfers raises questions about unit value. What is the typical selling price of a Goosehead franchise in the secondary market, and do these prices support the transfer fee?

The 30-year total potential term with 2 renewal options is significantly longer than typical. Does this extended term provide any competitive advantage to franchisees, or does it primarily benefit franchisor control?