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Brightway Insurance
How much does Brightway Insurance cost?
Initial Investment Range
$23,325 to $136,900
Franchise Fee
$10,000 to $25,000
The franchisee (which we refer to as an “Agency Owner”) will operate a Brightway Location that will primarily engage in the business of selling, servicing and delivering property and casualty insurance policies.
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Brightway Insurance April 18, 2025 FDD Risk Analysis
Free FDD Library AI Analysis Date: July 16, 2025
DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The parent company's audited financials for 2023 and 2024 show significant, consecutive annual net losses (over $27 million in 2024) and a large accumulated deficit (over $100 million). This indicates potential financial instability, which could impair the franchisor's ability to provide support or invest in the system. State regulators in Illinois and Maryland have required the franchisor to obtain surety bonds due to its financial condition, confirming this risk.
Potential Mitigations
- Your accountant must conduct a deep analysis of the parent company's financial statements, focusing on the causes of the net losses and the status of the going concern issues.
- It is crucial to discuss with your attorney the protections afforded by any state-required surety bonds.
- A business advisor can help you assess if the franchisor's financial condition puts your investment at an unacceptable level of risk.
High Franchisee Turnover
High Risk
Explanation
The data in Item 20 reveals a consistently high rate of franchisee turnover. In 2023 and 2024, the percentage of outlets that were terminated, ceased operations, or were not renewed was approximately 20% and 19% respectively, relative to the number of units at the start of each year. Such a high rate of franchisees leaving the system may indicate significant issues with the business model, franchisee profitability, or the support provided by the franchisor.
Potential Mitigations
- You should contact a significant number of former franchisees from the list in Item 20 to understand why they left the system.
- An analysis of the year-over-year turnover data with your accountant can help quantify the stability of the franchise network.
- Discussing the high turnover rates directly with the franchisor, with your attorney present, may provide additional context.
Rapid System Growth
Medium Risk
Explanation
The system experienced a significant growth spurt in 2023, adding 50 net new units, but this was followed by a dramatic slowdown in 2024 with only 3 net new units. This pattern, combined with the company's financial losses and high franchisee turnover, suggests that rapid expansion may have strained the franchisor's support capabilities, potentially contributing to the system's current instability. This volatility in growth could be a risk to new franchisees.
Potential Mitigations
- In your discussions with current franchisees, ask specifically about the quality and timeliness of franchisor support, particularly for those who joined during the 2023 growth period.
- Your business advisor can help you evaluate if the franchisor's infrastructure seems adequate to support the existing system size.
- Question the franchisor about the reasons for the dramatic shift in growth from 2023 to 2024 and their future growth strategy.
New/Unproven Franchise System
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor, Brightway Insurance, LLC (Brightway), began offering franchises in 2008 and has a substantial operational history with over 300 units. An unproven system can be risky due to the lack of a track record, underdeveloped support, and minimal brand recognition. While Brightway faces other challenges, it is an established franchise system.
Potential Mitigations
- When evaluating any franchise, it's wise to have your business advisor assess the franchisor's years in operation and the maturity of its systems.
- Your attorney should review the business history detailed in Item 1 for any signs of instability despite its age.
- An accountant can help analyze if an established system's financial performance shows signs of growth, stagnation, or decline.
Possible Fad Business
Low Risk
Explanation
This risk was not identified in the FDD Package. The business model involves selling property and casualty insurance policies, a long-established and essential service industry. A fad business, which is tied to a temporary trend, presents a risk of declining consumer interest that could jeopardize the long-term viability of your investment after the trend fades. This franchise does not appear to operate in a fad-driven market.
Potential Mitigations
- With any franchise opportunity, a business advisor can help you conduct market research to assess the long-term demand for its products or services.
- It is important to evaluate with your financial advisor whether a business concept has staying power beyond current trends.
- Your attorney should review the franchise term to ensure it aligns with a realistic projection of the business's market relevance.
Inexperienced Management
High Risk
Explanation
The FDD reveals significant recent turnover in key executive positions. The Chief Executive Officer joined in March 2024, and several other C-level officers also started in 2024 or 2025. Such substantial changes at the highest level of leadership, particularly when combined with the company's disclosed financial losses and high franchisee turnover, can signal instability and strategic uncertainty. This lack of continuity in management could pose a risk to consistent support and system direction.
Potential Mitigations
- In your discussions with current franchisees, it would be prudent to ask about their perception of the new leadership team and any changes in strategy or support.
- You should research the background and track record of the new executives to gauge their experience in franchising and the insurance industry.
- A business advisor can help you assess the potential impact of this management turnover on the company's future performance.
Private Equity Ownership
High Risk
Explanation
The franchisor is controlled by a private equity firm, GrowthCurve Capital, which also collects advisory fees. Private equity ownership can create pressure for short-term profitability to provide a return to investors. This might lead to decisions that benefit the PE firm's timeline over the long-term health of franchisees, such as cutting support services, increasing fees, or a quick sale of the company. This risk is amplified by the franchisor's current financial losses.
Potential Mitigations
- A business advisor can help you research the private equity firm's reputation and its track record with other franchise brands in its portfolio.
- It is important to discuss with current franchisees whether they have observed any negative changes in support or increases in costs since the acquisition.
- Your attorney should carefully review the franchisor's right to sell the system and the implications for your agreement if a sale occurs.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor discloses a multi-layered ownership structure, including several parent companies, in Item 1. Furthermore, audited financial statements for the ultimate parent and guarantor, Brightway Holdings, LLC, are provided in Item 21. Failure to disclose parent companies or provide their financials when they guarantee performance or are integral to the system can hide significant financial or operational risks.
Potential Mitigations
- Your attorney should always verify that the entities disclosed in Item 1 align with the financial statements provided in Item 21.
- If a parent company guarantees the franchisor's obligations, an accountant should review the parent's financials for stability.
- Ensure any guarantee from a parent company is a formal, legally binding document reviewed by your legal counsel.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 discloses the franchisor's history, including its origin as 'Miller Insurance Group, Inc.' in 2003 and its rebranding and conversion to an LLC. The document appears to provide a clear lineage. Failing to disclose or obscuring the history of a predecessor entity can hide past issues like bankruptcies, litigation, or high failure rates that could be relevant to your investment decision.
Potential Mitigations
- When analyzing an FDD, your attorney should always scrutinize Item 1 for any mention of predecessors, mergers, or asset acquisitions.
- A thorough review of litigation and bankruptcy history in Items 3 and 4 for both the current franchisor and any predecessors is critical.
- A business advisor can help you research the public records and reputation of any predecessor entities if necessary.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 3 discloses one concluded lawsuit filed by a franchisee, which the parties resolved. The FDD does not show a pattern of multiple, similar lawsuits alleging fraud, misrepresentation, or other systemic issues. A pattern of such litigation can be a major red flag indicating fundamental problems with the franchisor's business practices or franchisee relations.
Potential Mitigations
- It is crucial for your attorney to review any and all litigation disclosed in Item 3, regardless of the outcome.
- You should ask the franchisor about the nature of any disclosed lawsuits and how the underlying issues were addressed.
- A business advisor can help you search for information about undisclosed or informal disputes through online franchisee forums and reviews.
Disclosure & Representation Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Financial & Fee Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Legal & Contract Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Territory & Competition Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Regulatory & Compliance Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Franchisor Support Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Operational Control Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Term & Exit Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Miscellaneous Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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