Brooke Franchise Business Opportunity
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BFC believes that sales of insurance, and other overlapping services, are best done by professionals that are local business owners where the primary assets of their businesses are customer relationships. Because the local business owner's personal net worth is directly related to customer relationships, it follows that customers will be better served by local business owners.
As it should be, professionals that are local business owners are usually more proficient at their profession than they are at operating a business. Local business owners often times lack competitively priced products, operational economies of scale, management depth, financial discipline, marketing staffs, branding and other such support that large corporations provide their employees. To significantly improve the odds for business success, BFC provides franchising services to local business owners. Business success by local business owners requires the discipline, support and resources that a large franchise organization like BFC provides. As BFC's corporate name indicates, franchising is the foundation of BFC's business operations, and it now has more than 380 total franchise locations.
Business Model - Business success begins with sound daily business operations. BFC's franchise provides local business owners with a proven business model that was pioneered by BFC and is more fully described in "Death of an Insurance Salesman?". A basic premise of BFC's franchise program is that local business owners must outsource certain processing activities to a franchisor that can generate sufficient economies of scale to reduce administrative expenses and increase productivity. The effectiveness of BFC's business model is readily apparent. The January 2004 edition of Entrepreneur magazine lists BFC as the number 1 U.S. financial services franchise and the 45th fastest growing of all franchises.
From the very first day of ownership, BFC's business model anticipates the eventual sale of the franchise business. Accordingly, business operations are structured to promote the business characteristics that future prospective buyers require, such as: 1) cash management processes to provide verifiable commissions and revenue reconciliations, 2) responsible document management to provide the new owner with good customer information and files, 3) marketing and branding activities that provides the new owner with some expectation of future revenues, and 4) standardized procedures that provide a seamless transfer of operations to the new owner. As the result of implementing this business model, BFC believes that the market value of a local business is comparatively more as a BFC franchise. BFC compiles comparative sales information that supports this conclusion.
As with other types of franchises, the cost for access to BFC's business model is an initial franchise fee and a share of sales commissions or other revenues. However, BFC regards franchising costs as insurance premiums that help insure a local business owner's success and a generous payday when it comes time to "cash in their chips".
Competitive Products - BFC's purchasing power provides franchisees with more, and more competitively priced, products than would otherwise be available. For example, as one of the largest insurance agencies in the country, BFC has relationships with hundreds of insurance companies including industry titans Safeco and Travelers.
Marketing Assistance - BFC has established specialized marketing teams at its national office that assist franchisees in marketing to their customers. These marketing teams are clearing houses for industry and franchisee marketing experiences. BFC pays up to 50% of franchisees' advertising and marketing expenses if the expenses are in accordance with its standards for promoting a common brand.
Branding - Use of a trusted brand name can result in additional sales, much like additional sales that can result from a product endorsement. Although a trusted brand name may attract inquiries from an internet customer, because of the complexity of many insurance related services, the assistance of a local franchisee is often required to provide individualized customer support. BFC believes that franchisees with a trusted brand name, local presence and franchisor support are well-positioned to compete with Internet and telephone sales of insurance and related services.
Document Management - BFC intercepts mailings and electronic files for scanning into its proprietary document management system. Millions of pages of customers' documents have been scanned and are available by secure web access. BFC's document management services include: 1) storing customer documents as electronic images for viewing on a web site, and 2) maintaining customer name and address data for accurate ownership identification and reliable document searching.
Personal Management - As local small business owners, franchisees' business activities are inevitably intertwined with their personal life. BFC's recent personal management initiatives include seminars on personal issues such as tax planning, sales training, time management, file management and employee supervision. Additionally, to reduce franchisees' expenses for office equipment, supplies and other services, BFC has formed a buying group to negotiate volume discounts from UPS, Corporate Express and other suppliers. BFC's personal management services also include electronic tools for personal communication such as: 1) licenses to access BFC's Microsoft Exchange, 2) email addresses using BFC's domain name, and 3) significant file storage for emails.
Cash Management - BFC's cash management services include: 1) daily consolidation of all cash collected by franchisees, 2) recording customer receipts to franchisees' account statement, 3) recording customer checks to franchisees' account statements, and 4) reconciling sales commissions and other revenue to franchisees' account statement. BFC's cash management processes reduce the opportunities for franchisees to redirect, for their personal use, money that belongs to customers, insurance companies and other suppliers.
Financial Discipline - BFC helps bring the financial discipline of a large company to its franchisees. This process begins with education of franchisees on how to create budgets, compile cash flows and complete credit applications. Because the value of franchisees' businesses is determined by revenues, BFC's most important check on its franchisees' financial health is a monthly comparison of franchisee revenues to franchisee debt. Negative trends trigger an immediate consultation by BFC with franchisees to discuss causes and remedies. BFC has also developed processes for monitoring franchisee billed, or agent billed, accounts that have not been collected by franchisees.
Ownership Protection - The primary assets of franchisees' businesses are customer relationships which are intangible with no "tires to kick". This makes ownership difficult to define. Therefore, BFC has established legal standards that specifically identify ownership interests in customer relationships, which make ownership transfers easier and increase business value. BFC promises to help protect the proprietary nature of franchisees' customer relationships. To further protect franchisees, BFC utilizes Brooke Agency Services Company, LLC, a separate bankruptcy remote entity, to distribute funds and hold legal agreements. All funds received from insurance companies for sales commissions, or from customers for franchisee billed premiums, are deposited into a trust account at the Bank of New York as trustee and distributed to franchisees by Brooke Agency Services Company.
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