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When Cuban immigrant Nicolas Estrella Sr. started selling auto insurance in Miami in the 1970s, he uttered the first line. “His last name means ‘star’ in Spanish, so he and other Latino immigrants could bet on the same falling star: the American Dream.” “He realized he could fill a void in the market for the larger Hispanic community,” said his son, Nicholas Estrella Jr.
Mr. Estrella Jr. became president of Estrella Insurance in 2006. At the time, the company had his 40 corporate stores and his three franchises, a holdover from his franchising efforts in the ’90s. However, when Estrella Jr. took a closer look at the franchise’s finances, he was surprised by what he discovered. “They didn’t do it. good” he says. “But they were doing very decently without any support. And the profit margins in that kind of business were much higher than in the corporate model.” This made him question : Should Estrella Insurance try franchising again?
Currently, the company has no corporate stores, 206 franchise stores nationwide, and is growing rapidly. The company still sells auto insurance, but also offers many other insurance policies, including pet, boat, health, home, and more. Here Estrella his junior talks about pivoting.
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How difficult was it to transition to a franchise business model?
It was very difficult. At that time, the company had fewer than 400 employees, with sales representatives working in corporate stores and all back-office employees working in a central office. [Back-office workers] Although they make up a significant percentage of an organization’s overall workforce, in a franchise model, franchisees become their own department and perform their own administrative tasks. So, unfortunately, I had to let go of a number of employees, many of whom had been with us for a long time and were like family.
How did you find your first franchisees?
We made existing business owners an offer they couldn’t refuse. We provide financing to acquire and franchise businesses. It took me two or two and a half years to make it.
Now that you’ve started expanding nationwide, are you still primarily targeting the Hispanic community?
What we perceive is a metropolitan area with density and diversity. That’s where our business model works best. Although these are not the only Hispanic areas, the United States has seen a significant increase in the number of Hispanic residents over the past 30 years.
Are most of the franchise owners Hispanic?
Mainly Hispanic women. We started with a basket in an office where the manager was a woman. This was, to some extent, by design. My father felt that these women were easier to relate to. They were trying to interact with the community much better than the male persona. But they saw the success their boss was experiencing and said, “I want to benefit from that, too.” So they contacted us and we provided them with the support they needed to grow and become financially independent.
How have things changed since your father started selling insurance?
The evolution of immigrant communities has changed everything. They are now business owners. They have their own grocery store. They have their own gas station. They have their own maintenance shop. They became lawyers. They became doctors. They grew, which allowed us to grow as well.
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