Insurance Franchise

Captive, Franchise, or Independent: Which Insurance Agency Model Is Right for You?

Jul 7, 2025

Choosing the right path to agency ownership starts with a crucial question: should you go independent, captive, or partner with a franchise? Each option comes with distinct advantages, trade-offs, and costs. This guide breaks down the real differences between independent, franchise, and captive insurance agencies—what you’ll invest, how you’ll grow, and what you can expect day-to-day.

What Is an Independent Insurance Agency?

An independent insurance agency is a business fully owned and operated by the agent, free from franchise or corporate affiliations, with the flexibility to represent multiple insurance carriers rather than being tied to just one. Typically, independent agencies contract directly with multiple carriers or access products through networks or aggregators. The agency principal is responsible for all aspects of the business: technology, marketing, operations, compliance, and service.

Key Characteristics:

100% owner control
Choose your own tech, office model, marketing, and staff
Retain full commission and equity
Must secure your own carrier appointments (the insurance products you sell)
Startup costs can vary significantly: $20,000-$175,000+

Independent agencies have the potential to build long-term value and equity that is entirely owned by the agency principal. However, infrastructure, carrier appointments, and marketing all require upfront planning and capital.

Sources: Insureon - Insurance Agency Startup Guide

What Is a Franchise Insurance Agency?

A franchise insurance agency is still an independent agency—but one that operates under the brand and systems of a larger company. In exchange for franchise fees and/or commissions? splits, owners can receive support with marketing, technology, accounting, training, service, carrier product access, and infrastructure, depending on the model.

Key Characteristics:

Branded support and operational playbook
Built-in carrier relationships
Provided tech platforms and marketing tools (some)
Ongoing royalties or fees
Lower barrier to entry but less autonomy
Typical costs range from $20,000–$175,000+
Post-bind servicing (some)

Franchise agencies offer quicker paths to market due to existing carrier relationships, agency management systems, and turnkey onboarding support. This model suits owners looking to scale quickly through a proven system.

Sources: FranchiseByte

What Is a Captive Insurance Agency?

A captive agency represents a single insurance carrier. These agents are often independent contractors of an insurance carrier and are limited to selling that one insurance carrier’s products. Compensation structures typically include salary, commission, and bonuses.

Key Characteristics:

Represent only one insurance company
Use proprietary systems and processes
Receive carrier-provided training, leads, and sometimes salary or benefits
Limited product flexibility and no ownership of the book in many cases
Often subject to quotas and strict brand compliance
Typical costs range from $50,000-$100,000+

Captive agencies offer a more secure and structured path into the industry, often with lower financial risk, but significantly reduced autonomy and long-term equity, and no insurance product choice to provide clients.

Sources: Investopedia – What is a Captive Insurance Company

Comparison Table: Independent vs. Franchise vs. Captive

Factor	Independent	Franchise	Captive
Ownership	100% self-owned	Self-owned/licensed brand operator	Owned by or contracted to carrier
Carrier Access	Must secure independently	Established by franchisor	Exclusive to one carrier
Support	Self-driven	Some provide service support along with accounting, tech, recruiting, onboarding, training and marketing support	Carrier-provided systems and training
Technology	Outsourced or self-built	Pre-integrated and standardized or proprietary to the franchisor	Proprietary to the carrier
Brand	No brand recognition	Inherits franchise brand	Established national brand
Commission Split	100% (minus potential aggregator fees)	Varies but typically 75%-90% on New Business and 50%-75% on Renewals	Lower commissions, some salary
Initial Investment	$20,000-$175,000	$25,000-$120,000+	$50,000-$100,000+
Time to profitability	Longer	Faster with turnkey support	Moderate-often salary supplemented
Distressed Market Impact	Can pivot to other carriers and products	Can pivot to other carriers and products	Impact can be devastating especially if carrier pulls out of market entirely
Exit Flexibility	Full equity and sale rights	Some offer multiple exit options	Often restricted

How Each Model Supports Growth

Growth in independent agencies is self-paced and tied to personal bandwidth and capital. Franchise agencies benefit from scalable systems, referral networks, and shared services. Captive agents may have easier early-stage growth but limited long-term scalability or ownership.

Franchises and captive carriers often include built-in training and marketing programs. Independent agents must source, integrate, and optimize all systems on their own.

Technology is another major differentiator. Independent agents must evaluate and integrate multiple systems (CRM, AMS, VoIP), while franchisees often receive a fully integrated suite that supports quoting, communications, servicing, and commissions out of the box.

Customer service responsibilities also vary. Independent and captive agents often handle service in-house or outsource it, while franchises may offer centralized servicing that allows owners to focus more on production.

Marketing support is also a key difference. Independent agencies must develop their brand identity and local marketing strategy from scratch. Franchise models typically offer a national marketing strategy and collateral that can be customized for local outreach. This can include automated email campaigns, pre-approved social content, and creative support. Many captive insurance brands are well-known but may require ad fees.

Which Model Is Right for You?

Ask yourself:

Do I want full autonomy or structured support?
Is brand control important to me?
Do I want to own my book or am I comfortable working for a carrier?
How much startup capital do I have?
How quickly do I need to generate income?

Each model offers a different risk/reward balance. Independent agenciesce provides long-term equity. Franchises offer accelerated growth and support. Captive paths deliver security and simplicity with limited upside.

If you thrive on full ownership and control, independence may suit you. If you prefer speed, support, and brand recognition, franchising may offer a better runway.

Keep in mind that any path requires commitment, licensing, compliance, and ongoing investment—but the experience of launching and scaling will feel very different.

Final Thoughts

There’s no one-size-fits-all answer. Each path to agency ownership—independent, franchise, or captive—comes with trade-offs in control, cost, and growth potential. The best decision aligns your skills, resources, and long-term vision.

The most successful agencies—regardless of model—share a common trait: the ability to stay focused on revenue-producing activities while leveraging the right tools and people to grow. The difference lies in how much of that infrastructure you want to build yourself.

If you're considering the franchise route, visit here to learn more about owning a Brightway agency, one of the industry’s most recognized and scalable models.