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When Cuban immigrant Nicolas Estrella Sr. started selling auto insurance in Miami in the 1970s, he had an opening line: His last name meant “star” in Spanish, so he and other Latino immigrants could bet on the same shooting star — the American dream. “He realized he could fill a void in the marketplace for the greater Hispanic community,” says his son, Nicolas Estrella Jr.
Estrella Jr. took over as president of Estrella Insurance in 2006. At the time, the business had 40 corporate stores and three franchises, left over from a previous attempt at franchising in the ’90s. But when Estrella Jr. took a closer look at the franchises’ finances, he was surprised by what he found. “They weren’t doing well,” he says, “but they were doing very decently without any type of support. And the profit margin on that type of business was much greater than the corporate model.” This made him wonder: Should Estrella Insurance try franchising again?
Today, the company has no corporate stores, 206 franchises across the nation, and is growing rapidly. It still sells auto insurance, but offers many other policies as well — including for pets, boats, health, home, and more. Here, Estrella Jr. talks about the pivot.
How hard was it to transition to the franchise business model?
It was very difficult. At the time, we had a hair under 400 employees, with salespeople working at the corporate stores and back-office employees who all worked from a central office. [Back-office workers] made up a significant share of employees in the whole organization — but under the franchising model, franchisees become their own units and do their own back-office work. So unfortunately, I had to lay off a lot of the corporate employees, many of whom had been with us for so long they were like family.
How did you find your first franchisees?
We made the existing managers an offer they couldn’t refuse: We would provide them with the financing to buy the business and convert it into a franchise. We did it over a span of two or two and a half years.
Now that you’ve gone national, do you still mostly market to Hispanic communities?
What we identify is metropolitan areas that have density and diversity. That’s where our business model works best. These aren’t solely Hispanic areas, but there’s been a significant amount of Hispanic growth in the U.S. over the last 30 years.
Are many of the franchise owners Hispanic?
Predominately Hispanic women. We started off with a basket of offices where the managers were women. This was something that, to a certain extent, was by design. My father felt that these women were more approachable. They were going to interact with the community much better than the male persona. But when they saw the success their bosses experienced, they said, “I want my share of that.” So they reached out to us, and we gave them the support they needed to thrive and be financially self-sustaining.
How have things changed from when your father started selling insurance?
The evolution of the immigrant community has changed everything. They are business owners now. They have their own grocery stores. They have their own gas stations. They have their own mechanic shops. They have become lawyers. They have become doctors. They have grown, and it has allowed us to grow too.