E36: Franchise Insurance Do’s and Don’ts With Chris Stark

Hosts: Michael Hyam and Liane Caruso
Guests: Chris Stark, Senior Insurance Executive at Advantage Insurance Brokers

On a recent episode of the LFG Podcast, Chris Stark, Senior Insurance Executive at Advantage Insurance Brokers, revealed some eye-opening insights and surprising truths about franchise insurance.

Perhaps the most striking revelation from the conversation was how underserved the franchise industry is when it comes to specialized franchise insurance support. Despite franchising being a multi-billion dollar industry, Chris noted that he was the first and only insurance broker to participate in franchise conferences and industry events. This absence is particularly puzzling given that insurance companies actively seek out franchise clients.

“Every insurance company that I speak with, they’re always a target class is always franchises,” Chris explained. In fact, when he asked an insurance executive vice president about growth opportunities, the first word out of their mouth was “franchises.”

The interview continues on with the do’s and don’ts of franchise insurance, with Chris sharing entertaining examples and his important perspective on how this particular part of franchising can be leveraged for growth, and create new opportunities.

Podcast Summary: Franchise Insurance Isn’t Boring, It’s a Massive Opportunity For Franchise Brands

Why Franchises Need Specialized Franchise Insurance Brokers

The Complexity Challenge

Franchise insurance isn’t just complicated—it’s uniquely complicated. Take daycare franchises as an example: their insurance applications can span 20-30 pages, filled with industry-specific questions that general brokers may not fully understand. When franchisees are already juggling the challenges of starting a new business, navigating complex insurance requirements shouldn’t add unnecessary stress.

The Repetition Advantage

One of the key benefits of working with a franchise-focused broker is their deep understanding of specific business models. As Chris put it, “a daycare is a daycare is a daycare” from a risk standpoint. This specialized knowledge allows brokers to streamline processes, anticipate common questions, and provide more efficient service across multiple locations.

Buying Power Through Consolidation

When a broker works with multiple locations of the same franchise, they can leverage collective buying power. Instead of treating each location as a one-off risk, insurance companies can offer better rates and enhanced coverage when they understand the franchise model and can spread risk across multiple locations.

The Technology-Human Balance

An interesting insight from the conversation was the failed push toward fully digital insurance brokerages over the past decade. While investors thought people would prefer online-only insurance purchasing, the reality proved different. People still want to speak with their brokers, especially when making significant financial decisions about coverage that could cost thousands of dollars and involve hundred-page policy documents.

Chris’s company has found the sweet spot: using technology to automate mundane tasks while preserving human interaction for the important conversations. They can set up custom platforms and applications within a week, but they still talk to almost every client they onboard.

Market Timing: The Soft Market Advantage

The interview revealed that 2024 represents an opportune time for franchises to evaluate their insurance needs. After five years of a “hard market” (2019-2024) where insurance rates increased dramatically and some companies actually sold out of coverage, the industry is now entering a “soft market.” This means insurance companies are eager to write new business and more open to offering reduced rates and enhanced coverages.

Innovative Coverage Solutions

Specialized franchise insurance brokers can offer creative solutions that general brokers might not consider. Chris shared examples of bespoke coverages, including:

• Shared cyber policies across multiple franchise locations, spreading the risk and reducing individual location costs
• Blanket endorsements covering all locations under higher limits
• Industry-specific coverages tailored to unique franchise risks

Building Trust in a Tight-Knit Community

The franchise industry is known for being a close-knit community where relationships matter. Chris’s approach to entering this space demonstrates the importance of authentic relationship-building. His journey began with existing client relationships and expanded through networking with industry leaders like Robert Brewski (Control franchise) and Brian Baisley, who confirmed the gap in specialized insurance services for franchises.

Franchise Insurance Takeaways for the Brand Stakeholders

For Franchisors:

• Consider partnering with specialized insurance brokers as part of your franchisee support system
• Evaluate whether your current insurance recommendations truly serve your franchisees’ best interests
• Explore opportunities for group coverage that could benefit all locations

For Franchisees:

• Don’t treat insurance as an afterthought—seek brokers who understand your specific franchise model
• Ask detailed questions about exclusions, deductibles, and coverage specifics
• Consider the value of working with brokers who serve multiple locations in your franchise system

For the Industry:

• The insurance gap represents an opportunity for better franchisee support and potentially reduced costs
• Specialized service providers who truly understand franchising can add significant value
• The franchise community’s collaborative nature can benefit everyone when leveraged properly

How Is Franchise Insurance Moving Forward?

As the franchise industry continues to grow and evolve, the need for specialized support services becomes increasingly important. Insurance may not be the most exciting topic, but as Chris’s insights demonstrate, it’s a critical component of franchise success that deserves more attention.

The fact that insurance companies want to work with franchises, but specialized brokers haven’t emerged to serve this market, represents both a challenge and an opportunity. For franchise stakeholders willing to think beyond traditional support services, there’s clearly room for innovation in how insurance needs are met.

The franchise industry’s strength has always been in its community-focused approach and shared learning. When it comes to insurance, that same collaborative spirit could lead to better coverage, lower costs, and reduced headaches for everyone involved.

Watch the full episode now to hear more from Chris and the LFG Podcast team!