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  "documentTitle": "Goosehead Insurance, Inc. (GSHD)",
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  "authorName": "Wolfpack Research",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-02-16 00:00:00",
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  "notes": "Includes a transcript of an interview with a former franchise recruiter regarding deceptive sales tactics.",
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      "text": "The slow-down in the housing market is not the only flaw in GSHD's growth narrative. As franchises proliferate, they start competing for the same referral partners.",
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      "text": "It is our understanding from our conversations with former employees that most franchisees finance their fees. One former employee told us 65% of franchisees financed their fees, but a franchise recruiter indicated that the number was closer to 95%.",
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      "text": "Investors should not be happy with this expansion either, as the corporate channel has lower margins, in fact, the CEO Mark Jones characterized the corporate channel as a break-even enterprise.",
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      "text": "The median GSHD franchisee made just $38,400 from their business in the first year of their tenure. For franchisees that financed their fee, they also paid $6,000-10,000 (depending on their state) in their first year for their debt.",
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      "text": "The slow-down in the housing market is not the only flaw in GSHD’s growth narrative. As franchises proliferate, they start competing for the same referral partners. This competition amongst franchisees makes it more difficult for newer franchisees to get established.",
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      "text": "In Texas from 2019-2021, 124 new outlets opened, and 55 were terminated or closed. The overall rate for GSHD in the same period was substantially better, with 1,003 outlets opened and 262 terminated or closed.",
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      "text": "Franchise Recruiter: A lot of the [prospects] would always have that concern... And what we were trained to say is that 'You have the entire state of Texas,' and you have so many people in the state of Texas that there is enough to go around.",
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      "text": "Franchise Recruiter: A lot of the [prospects] would always have that concern, “Don’t you have an entire team focused on the DSW-Texas Area?” And what we were trained to say is that “You have the entire state of Texas,” and you have so many people in the state of Texas that there is enough to go around for everyone, is what they would tell you to say. Interviewer: That makes no sense... Franchise Recruiter: Yeah, no. It doesn’t. If you think about it. Interviewer: Yeah, because they are telling you to go face-to-face with somebody to develop a relationship, and I don’t know how you are going to do that from Dallas to San Antonio. Franchise Recruiter: Yeah, exactly. And it is a lot harder on the phone. — Former Franchise Recruiter",
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      "text": "GSHD’s Corporate Channel is Cannibalizing Its Franchisees",
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