When Cuban immigrant Nicolas Estrella Sr. began promoting auto insurance coverage in Miami within the Seventies, he had a gap line: His final identify meant “star” in Spanish, so he and different Latino immigrants might wager on the identical capturing star — the American dream. “He realized he might fill a void within the market for the better Hispanic group,” says his son, Nicolas Estrella Jr.
Estrella Jr. took over as president of Estrella Insurance coverage in 2006. On the time, the enterprise had 40 company shops and three franchises, left over from a earlier try at franchising within the ’90s. However when Estrella Jr. took a better have a look at the franchises’ funds, he was shocked by what he discovered. “They weren’t doing effectively,” he says, “however they have been doing very decently with none sort of help. And the revenue margin on that sort of enterprise was a lot better than the company mannequin.” This made him surprise: Ought to Estrella Insurance coverage strive franchising once more?
As we speak, the corporate has no company shops, 206 franchises throughout the nation, and is rising quickly. It nonetheless sells auto insurance coverage, however presents many different insurance policies as effectively — together with for pets, boats, well being, dwelling, and extra. Right here, Estrella Jr. talks concerning the pivot.
How onerous was it to transition to the franchise enterprise mannequin?
It was very tough. On the time, we had a hair underneath 400 staff, with salespeople working on the company shops and back-office staff who all labored from a central workplace. [Back-office workers] made up a major share of staff in the entire group — however underneath the franchising mannequin, franchisees turn out to be their very own models and do their very own back-office work. So sadly, I needed to lay off plenty of the company staff, a lot of whom had been with us for thus lengthy they have been like household.
How did you discover your first franchisees?
We made the prevailing managers a suggestion they could not refuse: We would supply them with the financing to purchase the enterprise and convert it right into a franchise. We did it over a span of two or two and a half years.
Now that you have gone nationwide, do you continue to largely market to Hispanic communities?
What we determine is metropolitan areas which have density and variety. That is the place our enterprise mannequin works finest. These aren’t solely Hispanic areas, however there’s been a major quantity of Hispanic progress within the U.S. over the past 30 years.
Are lots of the franchise house owners Hispanic?
Predominately Hispanic ladies. We began off with a basket of places of work the place the managers have been ladies. This was one thing that, to a sure extent, was by design. My father felt that these ladies have been extra approachable. They have been going to work together with the group a lot better than the male persona. However after they noticed the success their bosses skilled, they stated, “I would like my share of that.” So that they reached out to us, and we gave them the help they wanted to thrive and be financially self-sustaining.
How have issues modified from when your father began promoting insurance coverage?
The evolution of the immigrant group has modified every part. They’re enterprise house owners now. They’ve their very own grocery shops. They’ve their very own gasoline stations. They’ve their very own mechanic retailers. They’ve turn out to be legal professionals. They’ve turn out to be docs. They’ve grown, and it has allowed us to develop too.
Associated: The Professionals and Cons of Franchising Your Enterprise
