Goosehead Insurance, Inc. Announces Fourth Quarter and Full Year 2024 Results


Total Revenue Increased
20%
for the year to
$314.5 million



Core Revenue Grew
17%
for the year to
$273.7 million



Total Written Premium in
2024
Increased
29%
to
$3.8 billion



2024
Net Income of
$49.1 million
versus
$23.7 million
in
2023



Adjusted EBITDA in
2024
up
43%
to
$99.9 million

WESTLAKE, Texas, Feb. 24, 2025 (GLOBE NEWSWIRE) — Goosehead Insurance, Inc. (“Goosehead” or the “Company”) (NASDAQ: GSHD), a rapidly growing independent personal lines insurance agency, today announced results for the fourth quarter and year ended December 31, 2024.

Fourth
Quarter
2024
Highlights

  • Total Revenues grew 49% over the prior-year period to $93.9 million in the fourth quarter of 2024
  • Fourth quarter Core Revenues* of $68.0 million increased 19% over the prior-year period
  • Fourth quarter net income of $23.8 million improved from net income of $5.4 million a year ago. EPS of $0.60 per share increased 300% and adjusted EPS* of $0.79 per share increased 182%, over the prior-year period
  • Net income margin for the fourth quarter was 25%
  • Adjusted EBITDA* of $37.4 million increased 164% from $14.1 million in the prior-year period
  • Adjusted EBITDA Margin* increased 17 percentage points over the prior-year period to 40%
  • Total written premiums placed for the fourth quarter increased 28% over the prior-year period to $965.6 million
  • Policies in force grew 13% from the prior-year period to approximately 1,674,000

*Core Revenue, Adjusted EPS, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP measures. Reconciliations of Core Revenue to total revenues, Adjusted EPS to basic earnings per share and Adjusted EBITDA to net income, the most directly comparable financial measures presented in accordance with GAAP, are set forth in the reconciliation table accompanying this release.

“We had an outstanding 2024 in the face of significant macro headwinds. For the full year premium growth was 29%, total revenue increased 20%, core revenue was up 17%, net income grew 107% to $49.1 million and Adjusted EBITDA grew 43% to $99.9 million, with net income margin of 16% up 700 basis points and Adjusted EBITDA Margin of 32% up 500 basis points,” stated Mark K Miller, President and CEO. “I am pleased we began to demonstrate growth re-acceleration in a number of key performance indicators including policies in force were up 13%. Our producer base is healthier than ever as franchise productivity was up 49%, coupled with franchise producer growth of 7%. Loss activity and insurance market challenges in 2024 and the start of 2025 have further highlighted the importance of appropriate personal lines coverage, as well as the value we bring to clients, agents and carriers. We are encouraged to be seeing signs of gradual improvement in the product market. I couldn’t be more excited for what lies ahead as we continue to invest in people and technology. This further expands our competitive moat as we progress on our journey to becoming the largest distributor of personal lines in the US.” 

Fourth
Quarter
2024
Results

For the fourth quarter of 2024, revenues were $93.9 million, an increase of 49% compared to the corresponding period in 2023. Core Revenues, a non-GAAP measure which excludes contingent commissions, initial franchise fees, interest income, and other income, were $68.0 million, a 19% increase from $56.9 million in the prior-year period. Core Revenues are the most reliable revenue stream for the Company, consisting of New Business Commissions, Agency Fees, New Business Royalty Fees, Renewal Commissions, and Renewal Royalty Fees. Core Revenue growth was primarily driven by strong client retention of 84% and rising premium rates as well as increases in both the number of corporate agents and productivity per agency. The Company grew total written premiums, which we consider to be the leading indicator of future revenue growth, by 28% in the fourth quarter compared to the corresponding period in prior year.

Total operating expenses, excluding equity-based compensation, depreciation and amortization and impairment expenses, for the fourth quarter of 2024 were $56.5 million, up 16% from $48.9 million in the prior-year period. The increase from the prior period was primarily due to increased employee compensation and benefits expenses related to investments in corporate producers, technology, and service functions. General and administrative expenses, excluding impairment, increased to $17.8 million from $14.1 million primarily due to investments in technology and systems to drive growth and continue to improve the client experience. Equity-based compensation increased to $6.9 million for the period, compared to $5.0 million a year ago. Bad debt expense of $0.6 million decreased from $1.0 million a year ago.

Net income in the fourth quarter of 2024 was $23.8 million versus net income of $5.4 million a year ago, with the improvement primarily due to strong revenue growth and expense discipline. Earnings per share and Net Income Margin for the fourth quarter of 2024 were $0.60 and 25%, respectively. Adjusted EPS for the fourth quarter of 2024, which excludes equity-based compensation and impairment expense, was $0.79 per share. Total Adjusted EBITDA was $37.4 million for the fourth quarter of 2024 compared to $14.1 million in the prior-year period. Adjusted EBITDA Margin of 40% was up 17 percentage points in the quarter.

Liquidity and Capital Resources

As of December 31, 2024, the Company had cash and cash equivalents of $58.0 million. We had an unused line of credit of $74.8 million as of December 31, 2024. Total outstanding term note payable balance was $93.1 million as of December 31, 2024.

On January 8, 2025, the Company entered into a credit agreement (the “2025 Credit Agreement”) providing for an aggregate $300 million term notes payable (the “2025 Initial Term Loan”) and $75 million revolving credit facility (the “2025 Revolving Credit Facility”). The 2025 Initial Term Loan matures on January 8, 2032 and the 2025 Revolving Credit Facility matures on January 8, 2030. This credit agreement replaces the existing Second Amended and Restated Credit Agreement, dated July 21, 2021, which was repaid with the proceeds of the 2025 Initial Term Loan and terminated.

On January 9, 2025, Goosehead Financial, LLC (“GF”) declared a special distribution of $175 million, which was paid in cash on January 31, 2025 to holders of record of LLC Units, including to GSHD, as of the close of business on January 21, 2025. The special distribution resulted in a payment of $59 million to our non-controlling interest holders. On January 9, 2025, the board of directors of the Company declared a one-time special cash dividend of $5.91 to all holders of Class A common stock of GSHD as of the close of business on January 21, 2025, which was paid in cash on January 31, 2025 for a total of $146 million. $1.22 of the special cash dividend was funded by cash received by GSHD from prior tax distributions from GF that are in excess of the corporate income taxes payable by GSHD. The remaining $4.69 of the special dividend was funded by the cash received by the Company from the special distribution by GF.

2025 Outlook

Our guidance for the full year 2025 is as follows:

  • Total written premiums placed are expected to be between $4.65 billion and $4.88 billion representing 22% organic growth on the low end of the range, and 28% organic growth on the high end of the range.
  • Total revenues are expected to be between $350 million and $385 million representing 11% organic growth on the low end of the range and 22% organic growth on the high end of the range.

Conference Call Information

Goosehead will host a conference call and webcast today at 4:30 PM ET to discuss these results.

To access the call by phone, participants should go to this link (registration link), and you will be provided with the dial in details.

In addition, a live webcast of the conference call will also be available on Goosehead’s investor relations website at http://ir.goosehead.com.

A webcast replay of the call will be available at http://ir.goosehead.com for one year following the call.

About Goosehead

Goosehead (NASDAQ: GSHD) is a rapidly growing and innovative independent personal lines insurance agency that distributes its products and services through corporate and franchise locations throughout the United States. Goosehead was founded on the premise that the consumer should be at the center of our universe and that everything we do should be directed at providing extraordinary value by offering broad product choice and a world-class service experience. Goosehead represents over 200 insurance companies that underwrite personal and commercial lines. For more information, please visit goosehead.com or goosehead.com/become-a-franchisee.

Forward-Looking Statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Goosehead’s expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or Goosehead’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, “outlook” or “continue”, or the negative of these terms or other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, conditions impacting insurance carriers or other parties with which Goosehead does business, the loss of one or more key executives or an inability to attract and retain qualified personnel and the failure to attract and retain highly qualified franchisees. These risks and uncertainties also include, but are not limited to, those described under the captions “1A. Risk Factors” in Goosehead’s Annual Report on Form 10-K for the year ended
December 31, 2024
and in Goosehead’s other filings with the SEC, which are available free of charge on the Securities Exchange Commission’s website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to Goosehead or to persons acting on behalf of Goosehead are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and Goosehead does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law.

Contacts

Investor Contact:
Dan Farrell
Goosehead Insurance – VP Capital Markets
Phone: (214) 838-5290
Email: [email protected]; [email protected] 

PR Contact:
Mission North for Goosehead Insurance
Email: [email protected]; [email protected]

Goosehead Insurance, Inc.

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

    Three Months
Ended December 31,
  Twelve Months
Ended December 31,
      2024       2023       2024       2023  
Revenues:                
Commissions and agency fees   $ 50,277     $ 27,424     $ 139,059     $ 116,061  
Franchise revenues     43,438       35,282       174,514       143,772  
Interest income     207       308       932       1,443  
Total revenues     93,922       63,014       314,505       261,276  
Operating Expenses:                
Employee compensation and benefits     45,044       38,803       172,942       152,604  
General and administrative expenses     17,833       14,092       67,069       62,111  
Bad debts     556       1,009       2,901       4,361  
Depreciation and amortization     2,639       2,427       10,453       9,244  
Total operating expenses     66,072       56,331       253,365       228,320  
Income from operations     27,850       6,683       61,140       32,956  
Other Income:                
Interest expense     (1,810 )     (1,511 )     (7,339 )     (6,568 )
Other income (expense)     (1,359 )           (7,101 )      
Income before taxes     24,681       5,172       46,700       26,388  
Tax expense (benefit)     859       (252 )     (2,413 )     2,692  
Net Income     23,822       5,423       49,113       23,696  
Less: net income attributable to non-controlling interests     8,968       1,803       18,688       9,556  
Net Income attributable to Goosehead Insurance, Inc.   $ 14,855     $ 3,620     $ 30,425     $ 14,140  
Earnings per share:                
Basic   $ 0.60     $ 0.15     $ 1.23     $ 0.59  
Diluted   $ 0.57     $ 0.14     $ 1.15     $ 0.55  
Weighted average shares of Class A common stock outstanding:                
Basic     24,562       24,688       24,657       23,929  
Diluted     38,399       25,516       38,301       38,356  
                                 



Goosehead Insurance, Inc.


Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

    Three Months
Ended December 31,
  Twelve Months
Ended December 31,
      2024       2023       2024       2023  
Revenues:                
Core Revenue:                
Renewal Commissions(1)   $ 18,171     $ 17,335     $ 74,938     $ 70,730  
Renewal Royalty Fees(2)     34,990       27,180       138,942       107,524  
New Business Commissions(1)     5,997       5,512       24,608       23,411  
New Business Royalty Fees(2)     6,725       5,349       27,122       23,168  
Agency Fees(1)     2,091       1,532       8,127       8,174  
Total Core Revenue     67,974       56,908       273,737       233,007  
Cost Recovery Revenue:                
Initial Franchise Fees(2)     1,332       2,458       6,620       11,238  
Interest Income     207       308       932       1,443  
Total Cost Recovery Revenue     1,539       2,766       7,552       12,681  
Ancillary Revenue:                
Contingent Commissions(1)     24,018       3,045       31,385       13,746  
Other Franchise Revenues(2)     391       296       1,831       1,843  
Total Ancillary Revenue     24,409       3,340       33,216       15,588  
Total Revenues     93,922       63,014       314,505       261,276  
Operating Expenses:                
Employee compensation and benefits, excluding equity-based compensation     38,155       33,765       144,971       128,615  
General and administrative expenses, excluding impairment     17,833       14,092       66,723       58,483  
Bad debts     556       1,009       2,901       4,361  
Total     56,544       48,866       214,594       191,459  
Adjusted EBITDA     37,378       14,148       99,911       69,817  
Adjusted EBITDA Margin     40 %     22 %     32 %     27 %
                 
Interest expense     (1,810 )     (1,511 )     (7,339 )     (6,568 )
Depreciation and amortization     (2,639 )     (2,427 )     (10,453 )     (9,244 )
Tax (expense) benefit     (859 )     252       2,413       (2,692 )
Equity-based compensation     (6,889 )     (5,038 )     (27,971 )     (23,989 )
Impairment expense                 (347 )     (3,628 )
Other Income (expense)     (1,359 )           (7,101 )      
Net Income   $ 23,822     $ 5,423     $ 49,113     $ 23,696  
Net Income Margin     25 %     9 %     16 %     9 %

(1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in “Commissions and agency fees” as shown on the Consolidated Statements of Operations within Goosehead’s Form 10-K for the twelve months ended December 31, 2024 and 2023.
(2) Renewal Royalty Fees, New Business Royalty Fees, Initial Franchise Fees, and Other Franchise Revenues are included in “Franchise revenues” as shown on the Consolidated Statements of Operations within Goosehead’s Form 10-K for the twelve months ended December 31, 2024 and 2023.



Goosehead Insurance, Inc.

Consolidated Balance Sheets

(Unaudited) 
(In thousands, except par value amounts)

    December 31,
      2024     2023
Assets        
Current Assets:        
Cash and cash equivalents   $ 54,280   $ 41,956
Restricted cash     3,693     2,091
Commissions and agency fees receivable, net     31,375     12,903
Receivable from franchisees, net     11,077     9,720
Prepaid expenses     8,139     7,889
Total current assets     108,564     74,559
Receivable from franchisees, net of current portion     3,469     9,269
Property and equipment, net of accumulated depreciation     24,101     30,316
Right-of-use asset     37,420     38,406
Intangible assets, net of accumulated amortization     25,075     17,266
Deferred income taxes, net     193,478     181,209
Other assets     5,546     3,867
Total assets   $ 397,653   $ 354,892
Liabilities and Stockholders’ Equity        
Current Liabilities:        
Accounts payable and accrued expenses   $ 22,894   $ 16,398
Premiums payable     3,693     2,091
Lease liability     6,535     8,897
Contract liabilities     3,275     4,129
Note payable     10,063     9,375
Total current liabilities     46,460     40,890
Lease liability, net of current portion     54,536     57,382
Note payable, net of current portion     82,251     67,562
Contract liabilities, net of current portion     15,191     22,970
Liabilities under tax receivable agreement     160,142     149,302
Total liabilities     358,580     338,106
Total equity     39,073     16,786
Total liabilities and equity   $ 397,653   $ 354,892


Goosehead Insurance, Inc.

Reconciliation Non-GAAP Measures to GAAP

This release includes Core Revenue, Cost Recovery Revenue, Ancillary Revenue, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS that are not required by, nor presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). The Company refers to these measures as “non-GAAP financial measures.” The Company uses these non-GAAP financial measures when planning, monitoring and evaluating its performance and considers these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures, tax position, depreciation, amortization and certain other items that the Company believes are not representative of its core business. The Company uses Core Revenue, Cost Recovery Revenue, Ancillary Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS for business planning purposes and in measuring its performance relative to that of its competitors.

These non-GAAP financial measures are defined by the Company as follows:

  • “Core Revenue” is a supplemental measure of our performance and includes Renewal Commissions, Renewal Royalty Fees, New Business Commissions, New Business Royalty Fees, and Agency Fees. We believe that Core Revenue is an appropriate measure of operating performance because it summarizes all of our revenues from sales of individual insurance policies.
  • “Cost Recovery Revenue” is a supplemental measure of our performance and includes Initial Franchise Fees and Interest Income. We believe that Cost Recovery Revenue is an appropriate measure of operating performance because it summarizes revenues that are viewed by management as cost recovery mechanisms.
  • “Ancillary Revenue” is a supplemental measure of our performance and includes Contingent Commissions and Other Income. We believe that Ancillary Revenue is an appropriate measure of operating performance because it summarizes revenues that are ancillary to our core business.
  • “Adjusted EBITDA” is a supplemental measure of the Company’s performance. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of items that do not relate to business performance. Adjusted EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization, adjusted to exclude equity-based compensation, impairment expense, and other non-operating items, including, among other things, certain non-cash charges and certain non-recurring or non-operating gains or losses.
  • “Adjusted EBITDA Margin” is Adjusted EBITDA as defined above, divided by total revenue. Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level.
  • “Adjusted EPS” is a supplemental measure of our performance, defined as earnings per share (the most directly comparable GAAP measure) before non-recurring or non-operating income and expenses. Adjusted EPS is a useful measure to management because it eliminates the impact of items that do not relate to business performance and helps measure our profitability on a consolidated level.

While the Company believes that these non-GAAP financial measures are useful in evaluating its business, this information should be considered as supplemental in nature and is not meant as a substitute for revenues, net income, or earnings per share, in each case as recognized in accordance with GAAP. In addition, other companies, including companies in the Company’s industry, may calculate such measures differently, which reduces their usefulness as comparative measures.

The following tables show a reconciliation from total revenues to Core Revenue, Cost Recovery Revenue, and Ancillary Revenue (non-GAAP basis) for the three and twelve months ended December 31, 2024 and 2023 (in thousands):

  Three Months
Ended December 31,
  Twelve Months
Ended December 31,
    2024     2023     2024     2023
Total Revenues $ 93,922   $ 63,014   $ 314,505   $ 261,276
               
Core Revenue:              
Renewal Commissions(1) $ 18,171   $ 17,335   $ 74,938   $ 70,730
Renewal Royalty Fees(2)   34,990     27,180     138,942     107,524
New Business Commissions(1)   5,997     5,512     24,608     23,411
New Business Royalty Fees(2)   6,725     5,349     27,122     23,168
Agency Fees(1)   2,091     1,532     8,127     8,174
Total Core Revenue   67,974     56,908     273,737     233,007
Cost Recovery Revenue:              
Initial Franchise Fees(2)   1,332     2,458     6,620     11,238
Interest Income   207     308     932     1,443
Total Cost Recovery Revenue   1,539     2,766     7,552     12,681
Ancillary Revenue:              
Contingent Commissions(1)   24,018     3,045     31,385     13,746
Other Franchise Revenues(2)   391     296     1,831     1,843
Total Ancillary Revenue   24,409     3,340     33,216     15,588
Total Revenues $ 93,922   $ 63,014   $ 314,505   $ 261,276

(1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in “Commissions and agency fees” as shown on the Consolidated Statements of Operations.
(2) Renewal Royalty Fees, New Business Royalty Fees, Initial Franchise Fees, and Other Franchise Revenues are included in “Franchise revenues” as shown on the Consolidated Statements of Operations.


The following tables show a reconciliation from net income to Adjusted EBITDA and Adjusted EBITDA Margin (non-GAAP basis) for the three and twelve months ended December 31, 2024 and 2023 (in thousands):

    Three Months
Ended December 31,
  Twelve Months
Ended December 31,
      2024       2023       2024       2023  
Net Income   $ 23,822     $ 5,423     $ 49,113     $ 23,696  
Interest expense     1,810       1,511       7,339       6,568  
Depreciation and amortization     2,639       2,427       10,453       9,244  
Tax expense (benefit)     859       (252 )     (2,413 )     2,692  
Equity-based compensation     6,889       5,038       27,971       23,989  
Impairment expense                 347       3,628  
Other (income) expense     1,359             7,101        
Adjusted EBITDA   $ 37,378     $ 14,148     $ 99,911     $ 69,817  
Net Income Margin(1)     25 %     9 %     16 %     9 %
Adjusted EBITDA Margin(2)     40 %     22 %     32 %     27 %

(1) Net Income Margin is calculated as Net Income divided by Total Revenue ($23,822/$93,922) and ($5,423/$63,014) for the three months ended December 31, 2024 and 2023. Net Income Margin is calculated as Net Income divided by Total Revenue ($49,113/$314,505) and ($23,696/$261,276) for the twelve months ended December 31, 2024 and 2023
(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue ($37,378/$93,922), and ($14,148/$63,014) for the three months ended December 31, 2024 and 2023, respectively. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue ($99,911/$314,505), and ($69,817/$261,276) for the twelve months ended December 31, 2024 and 2023.


The following tables show a reconciliation from basic earnings per share to Adjusted EPS (non-GAAP basis) for the three and twelve months ended December 31, 2024 and 2023. Note that totals may not sum due to rounding:

    Three Months
Ended December 31,
  Twelve Months
Ended December 31,
      2024     2023     2024     2023
Earnings per share – basic (GAAP)   $ 0.60   $ 0.15   $ 1.23   $ 0.59
Add: equity-based compensation(1)     0.19     0.13     0.75     0.64
Add: impairment expense(2)             0.01     0.10
Adjusted EPS (non-GAAP)   $ 0.79   $ 0.28   $ 1.99   $ 1.33

(1) Calculated as equity-based compensation divided by sum of weighted average Class A and Class B shares [$6.9 million/(24.6 million + 12.7 million)] for the three months ended December 31, 2024 and [$5.0 million/ (24.7 million + 13.2 million)] for the three months ended December 31, 2023. Calculated as equity-based compensation divided by sum of weighted average Class A and Class B shares [$28.0 million/(24.7 million + 12.7 million)] for the twelve months ended December 31, 2024 and [$24.0 million/ (23.9 million + 13.8 million)] for the twelve months ended December 31, 2023.
(2) Calculated as impairment expense divided by sum of weighted average Class A and Class B shares [$0.3 million/(24.7 million + 12.7 million)] for the twelve months ended December 31, 2024 and [$3.6 million/ (23.9 million + 13.8 million)] for the twelve months ended December 31, 2023. No impairment was recorded for the three months ended December 31, 2024 nor the three months ended December 31, 2023.



Goosehead Insurance, Inc.


Key Performance Indicators

    December 31, 2024   December 31, 2023
Corporate sales agents < 1 year tenured     253       135  
Corporate sales agents > 1 year tenured     164       165  
Operating franchises < 1 year tenured     90       183  
Operating franchises > 1 year tenured     1,013       1,043  
Total Franchise Producers     2,092       1,957  
QTD Corporate Agent Productivity < 1 Year (1)   $ 12,787     $ 13,789  
QTD Corporate Agent Productivity > 1 Year (1)   $ 26,788     $ 25,738  
QTD Franchise Productivity < 1 Year (2)   $ 17,861     $ 10,975  
QTD Franchise Productivity > 1 Year (2)   $ 29,089     $ 21,103  
Policies in Force     1,674,000       1,486,000  
Client Retention     84 %     86 %
Premium Retention     98 %     101 %
QTD Written Premium (in thousands)   $ 965,596     $ 756,082  
Net Promoter Score (“NPS”)     89       92  

(1) – Corporate Productivity is New Business Production per Agent (Corporate): The New Business Revenue collected related to corporate sales, divided by the average number of full-time corporate sales agents for the same period. This calculation excludes interns, part-time sales agents and partial full-time equivalent sales managers.
(2) – Franchise Productivity is New Business Production per Agency: The gross commissions paid by Carriers and Agency Fees received related to policies in their first term sold by franchise sales agents, divided by the average number of franchises for the same period, prior to paying Royalty Fees to the Company.