Brooke Insurance Franchise Boasts 80% - 90% Success Rate
(FranchisePick.Com) Despite the fact that Brooke Insurance operates in two of the nation’s most litigious sectors, Insurance and Franchising, they confidently make bold franchise sales claims others avoid. Is the Brooke Insurance franchise really that good?
Other than the bogus franchise vs. independent survival rate statistics that have been bandied about for the past two decades, most franchise companies avoid (at least publicly) discussing “success rates” with prospective franchise owners for a number of reasons. For starters, the term “success” means different things to different people. A franchisor may define “success” as not having closed their doors, or having reached break-even, whereas a franchisee may define success as a 15% or greater return than if they had plunked their money into a low risk or risk free investment, or being able to retire early. Another reason they avoid citing “success rates” is that the FTC and many states agencies explicitly prohibit franchisors from making statements to prospective franchisees that could be construed as promises of success. Citing a 90% success rate could certainly be taken as an indication that the odds for a given franchisee’s success is 9:1 in their favor.
Brooke Franchising Touts High Franchise Success Rate
Those concerns don’t seem to faze rapidly growing Brooke Franchising, Corp., which boasts an 80% - 90% success rate on its website:
The Brooke Startup Franchise Program is an important first step in ultimate business success. Our experience indicates that 80 to 90 percent of those who graduate from Brooke’s eight month startup program will ultimately become successful business owners. Those who survive the eight month startup program have demonstrated they have the right personality to succeed as a sales professional franchisee. Therefore, we believe the most important indicator of business success is the graduation, or success, rate of those in the Brooke Startup Franchise Program.
Most franchisors also avoid making “earnings claims” outside of the required format of Item 19 of the Uniform Franchise Offering Circular (UFOC). Brooke Franchising, Corp. openly posts expected initial revenues on their website as well:
…Startup success rates are determined based on franchisees achieving $4,000 in monthly commissions during the startup program period (or $1,500 in monthly commissions with good prospects to reach $4,000 with a three month extension). Although this commission threshold amount is relatively modest, it must be achieved while setting up an office, completing training and initiating insurance company relationships. Most importantly, by meeting this commission threshold amount, the franchisee has a revenue base from future renewal commissions.
Brooke Franchising: Aggressive Marketing, Unprecedented Growth.
According to the Kansas City Star, Brooke Corp.’s network of more than 800 insurance agencies appears to be headed for its first $1 billion premium year:
Based on the Overland Park financial services franchiser’s record $10.5 million share of those agencies’ premiums last month, “if September’s results continue for the next 11 months, we’ll reach that milestone,” said Kyle Garst, chief executive of the company’s franchising subsidiary, Brooke Franchise Corp….
Brooke executives think that continued expansion of the network, to an expected 1,000 locations, plus aggressive sales by agents will offset the industry trend, Garst said.
Confident Claims or Fraudulent Misrepresentation?
Since 2000, Brooke Corp. has had 12 franchise-related lawsuits filed against the company. According to a recent story in the Insurance Journal, ”Brooke Corp. was recently named in a lawsuit that alleges the company participated in fraud, negligence and violated the federal RICO Act (Racketeer Influenced and Corrupt Organizations Act).”
In the suit, Florida franchisee Arthur Mann alleges that Brooke intentionally misrepresented the yearly agency commissions and failed to fulfill its contractual obligations, among other problems. In the Insurance Journal article, Mann’s Attorney Brett C. Coonrod states that his client’s complaints aren’t isolated:
“My client’s claims are typical of other Brooke franchisees that I have represented and I believe that there are fundamental problems with Brooke’s accounting processes and its business model insofar as that model relates to the treatment of its agents.”
A related article cites claims from Brooke agents that the company and some of its franchising, lending and consulting subsidiaries misrepresented the profitability of the franchises Brooke sold, overbilled its franchisees for support services the company provided, and withheld income from agents.
Brooke founder and Chairman Robert Orr counters that franchisees are given ample opportunity to weigh the potential costs of doing business before they decide whether or not to buy in. Says Orr: “In my opinion, most of the people who are yelling now just aren’t that good handling money.”
WHAT DO YOU THINK? ARE YOU FAMILIAR WITH THE BROOKE INSURANCE FRANCHISE OPPORTUNITY? SHARE YOUR OPINION; LEAVE A COMMENT.
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POSTED IN: BROOKE INSURANCE
18 opinions for Brooke Insurance Franchise Boasts 80% - 90% Success Rate
Brooke Insurance Franchise Boasts 80% - 90% Success Rate at PIGASYS
Oct 23, 2007 at 2:08 pm
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Wes Shannon
Oct 26, 2007 at 10:22 am
I was a franchisee for 5 years with Brooke. It has ended very poorly and our issues are now in court. I personally, doubt the 80% to 90% success rate. The insurance industry (I have 25 years experience) has traditionally had only a 25 to 30% success rate of new agents staying in business beyond 3 years. From what I can tell Brooke’s true success rate is less than that.
Feel free to contact me via email or phone [Number Withheld] if you have any questions or concerns.
Sincerely,
Wes
Holly Burk
Oct 26, 2007 at 1:09 pm
I was a franchise and closed my doors in Feburary of 07.
Brooke is nothing but a scam to get you to fail so they can sell your agency for higher franschise fee and inflat the books so it looks like to the potential buyer they are getting a great deal.
We will be filing a lawsuit and have been signed with an attorney in Texas since March of ‘07.
The problems I had was not being able to see my true commission statements. I found out thru a carrier I was representing that they were withholding commisions. I have personally talk to many of the franchisee’s in Texas and they were taken advantage of more than just the commission statements. I know we had sold 4 life policies in July and never say those premiums on my statement!
It would be Brooke that would say that the ones that are not in business any more that they are not good with their money.
You can not be good with money with Brook because they screw you with out even pulling your pants down. They took me from $6000 a month in salary and that went to paying my staff to nothing.
How can you be good with Money if you don’t have money and you are working for Brooke for free.
Yes, my experience with Brooke has put me and many others in bankruptcy.
I have lost a home, 2 vehicles and a boat because of the BROOKE SUCESS SCAM. THIS IS JUST ANOTHER ENRON. WHY HAVE ALL THE HIGHER UPS STEPPED OUT OR DOWN FROM THEIR POSITION?
There al many lawsuits that are being filed and just not 12! I know of 5 states that are in the process of filing lawsuits against Brooke for there scams!!!!!!
This has effected many people…I know one couple who’s son tried to commit sucide due to them losing everything and he was about to go to college but after that no way to go to college.
THEY CLAIM THEY HAVE ALL OF THESE LOCATIONS, MANY ARE EMPTY, THE ONES THAT ARE EMPTY MOST LIKELY CAME FROM SOMEONE WHO THEY TOOK ADVANTAGE OF. THE NUMBER OF LOCATIONS INCLUDES THE FAILED OR CLOSED LOCATIONS.
Go to BXX yahoo message board and you can find phone #’s to people who have had the same Sucess experience I have had with Brooke.
I hope to help put them under.
Oh, By the way, I was in business over the 8 months.
Sincerely,
Holly
[Originally posted on Pigasys.com]
Still with Brooke 12 months
Oct 26, 2007 at 5:18 pm
I am still with them but, I have 14 years industry experience. You are right on target, they just started that hiding commission thing with me3 months ago. Charging you for whatever they want. Don’t question it, they will get very upset and black ball you. They are taing 4-5% of premium on top of what they are telling you, you are getting with the carrier. Several Reps with Carriers let me know that. My office is 2800 per month plus another 900 in utlities of their choosing.
They will charge you interest of 14% or higher on your own money! THIS IS MAJOR RIP OFF AND I am in 3rd month of no revenue or salary which they told me would not stop!!
Single mom of 3 scammed majorly!
[Crossposted Pigasys]
Brooke is Worthless
Dec 5, 2007 at 7:12 am
Nobody should ever join with Brooke on their start-up program. It is a recipe for disaster.
On existing books of business, Brooke will flaunt misleading figures and give you no documentation as to how they get that figure. From that point on, they will lie to you about how they calculate an agency’s value. They simply take the existing loans left behind by a defaulted agent and roll it over to the buyer. They lied to me and said that no part of my agency consisted of previous debt from the agent before me. 1 year later, I find out that the saddled me with not only the loans he signed to purchase the agency but also a few loans he took out to keep his agency afloat as it was tanking.
Brooke does not hold to any of its obligations in the contract. In mediation, I gave irrefutable proof and documentation showing where they agreed to reimburse me for certain expenses covered in the contract. I gave them emails where they said “fax it to X and we will take care of this.” I gave them the copies of the faxes and receipts with a time/date stamp confirmation page. 8 months later, they have not once contacted me to take care of their obligations on that.
This company is going south in their stock pricing and they are losing same-store sales every month. They are on the path towards folding. Their actions in response to this? They pay a dividend to stockholders. This tells you what they are in the business for.
And let me give a message to Mr. Orr on his comments about “poor money handling”. I have cut every expense I can. I have no employees. I borrow money from family. A founder of a company that cannot fulfill its obligations as clearly spelled out in a contract and a founder of a company that fails to provide me with requested documentation so that I can reconcile my commissions has no place commenting on the money practices of others. I doubt that Brooke will have the common sense to cut back on its expenses for upper level management despite its failing numbers. Mr. Orr, please come sit with me for one day and learn what it means to work before you make broad statements about people who foot the bill to your luxurious lifestyle.
Kevin
Dec 22, 2007 at 10:35 am
I would like to hear more about Brooke. I have been looking into a franchise with them, and I am just in the investigative part now. Please email me with any info to help thanks
Wes
Dec 26, 2007 at 4:05 pm
Find out more about brooke go to the Yahoo Finance site and look up brooke by its sticker symbol “BXXX” on the left-hand side of the quote screen is a link to the “message board”. There have been franchisees and employees posting their experiences with brooke since 2005. Read back a few months or years to get a view of this company.
Chuck Candler
Feb 22, 2008 at 1:55 pm
Wes, if you get this get in touch with me.
Chuck Candler
Guest
Feb 25, 2008 at 5:33 pm
IF YOU ARE A POTENTIAL FRANCHISEE… PLEASE STAY AWAY!!!
State Farm, All State, American Family… Brooke? Why would one pay $165k for that name?
The company will lend to ANYbody. Then Brooke claims to extend you a line of credit to cover expenses until you reach profitability, or your loan (usually 18 months) matures. After about six months you will get the news that your commission advance/line of credit has been discontinued. You ask why, and they claim that you need to hit your sales goal consistently. This is the first time you become aware of a sales goal .
They also try to sell you on this marketing coop (50% for approved marketing)… this does not exist. The only marketing that Brooke approves is their inflated Brooke merchandise (.50 pens, 5.00 mugs, etc).
If you need proof visit a couple local offices, you will find that 80% are empty, or have signs on the door asking you to call a number for assistance.
Rhonda Lobell
Mar 6, 2008 at 7:43 pm
Don’t do it. Run - don’t walk as far away as you can from these people. As of today, 03/06/08 thier stock has taken a nose dive to around $4.00 - it was at around $15 just May ‘07.
These people do not do anything that they promise. If you buy an agency from them - the due diligence is performed by an entity that is owned by Brooke themselves - as a result, the agencies are grossly overvalued. They will not disclose actual commission statements.
BEWARE!!!! BEWARE!!!! BEWARE!!!!
Alex Burgess
Apr 16, 2008 at 4:46 pm
Are you kidding? It’s done more than that… It’s a total disaster waiting to happen. I had an agency that was making 40k per month when I bought it as a Brooke Franchise. They dragged me along for two years never doing anything for me and lying to my face the whole time. Their accounting is absolutely abysmal. (for example, they automatically pay any invoice sent to them by any carrier, regardless of whether you collected money from the client, and then it’s up to YOU to make sure that the carrier returns the money, and then you have to make sure that you get credited back the money. It’s just another way to make sure you never make any money as the owner. They hold all the strings. It’s definitely setup to get you to fail.
Josh Smith
May 1, 2008 at 7:13 pm
I’m looking for someone to contact me regarding the Brooke Franchise Opportunity. jnk_home@yahoo.com
No Name
May 13, 2008 at 11:19 am
I wish I had read this thread as well as the BXXX message board before purchasing my agency. This company has cost me everything and I am sorry to say, I am glad to see that I am not crazy feeling as though I was the only one. This company needs desperately to be exposed. They really pulled the wool over my eyes. I thought that these people were the salt of the earth and could not do anything wrong. Now I am practically homeless, divorced and without my children. All thanks to my belief in this company and the people who work there. Boy was I a fool.
sean
May 13, 2008 at 11:30 am
This company needs desperately to be exposed.
No name, others: you should share your stories on the new site http://www.unhappyfranchisee.com, which is dedicated to documenting and exposing franchisee abuse, and warning others.
Visit the site or email them in confidence at unhappyfranchisee[at]gmail.com
J A
May 30, 2008 at 2:06 pm
I started a start-up agency with Brooke in November 05. They gave me 8 months to make $4k commission. The thing they failed to tell me was that it would take them 4 months to get me appointted with the carriers that I would be writing the majority of my business in. I did make the $4k, however, from there it spiralled down-hill. They started to hide my commissions and tell me that I wasn’t making the grade. I started writing big commercial policies and it would take 3 months for them to show up on my statement, then I wrote some life and health policies for a few companies in town. I know they were issued in March 07, because they are in the Kiwanis with me and told me so. Last week, I moved out of the office and called my DM today. I told her that they had ruined me financially and I will let everyone know how crooked they are. The final straw was when that life and health policy showed on my statement and the commission was 1/2 of what I should be given.
Dennis
Jul 6, 2008 at 3:20 pm
Just curious … Can anyone tell me:
When Brooke launched its franchise system?
How many franchisees have entered and subsequently left the system?
Of the franchisees who have since left the Brooke system, how many had prior experience as an insurance agent?
No name
Jul 19, 2008 at 8:48 am
You should try talking to the successful agents. They are happy & making $$! Make smart decisions and you won’t fail!
sean
Jul 19, 2008 at 10:28 am
You should try talking to the successful agents. They are happy & making $$! Make smart decisions and you won’t fail!
Can you recommend some we should speak to?
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