What changed in this filing

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Item 1. Business

2024-02-22 compared with 2023-02-27 · 97 added, 94 removed, 374 unchanged (34% of the section changed)

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We are a rapidly growing independent insurance agency, reinventing the traditional approach to distributing personal lines policies throughout the United States.

Our differentiated business model and innovative technology platform, have enabled us to deliver insurance customers a superior experience, as evidenced by our 90 Net Promoter Score which is 2.6x the 2021 P&C Industry Average.

Our differentiated business model and innovative technology platform have enabled us to deliver insurance customers a superior experience, as evidenced by our 92 Net Promoter Score, which is 2.6x the 2022 P&C Industry Average according to Statista.

To fully appreciate the value of our model, there are three lenses with which you can view us – from the perspective of 1) the insurance buyer;

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We believe that most clients currently buying through single-product platforms are either over-paying or not properly covered because 1) their current insurance company does not offer the appropriate coverage or 2) valuable coverages were removed to make the pricing competitive.

We are able to solve that by partnering with approximately 150 carriers and using technology to shop for our clients and quickly identify the Carrier who is targeting their segment of the market.

We are able to solve that by partnering with over 150 carriers and using technology to shop for our clients and quickly identify the Carrier who is targeting their segment of the market.

This allows us to provide value by finding the right coverage at the lowest price, and to do so in one phone-call so that the client does not have to spend hours shopping for themselves.

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Additionally, in contrast to the traditional insurance agency model, we separate the sales function from the service function, thus enabling agents to focus on selling, and service personnel to focus on delivering superior client service.

This model has helped drive best-in-class net promoter scores for client service, nearly 2.6x the 2021 P&C industry average according to Satmetrix.

This model has helped drive best-in-class net promoter scores for client service, nearly 2.6x the 2022 P&C industry average according to Statista.

Proprietary technology

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We have leveraged our scale to empower our agents and now our clients with technology that allows them to run quotes and place business quickly and accurately.

After signing their documents electronically, clients can engage with Goosehead’s industry leading service team via self-service, phone, text, online chat, or email.

Our choice model, superior sales and service agents, and proprietary technology has led to 88% client retention during 2022, which we believe is among the best in our industry.

After signing their documents electronically, clients can engage with Goosehead’s industry leading service team via phone, text, online chat, or email.

Our choice model, superior sales and service agents, and proprietary technology have led to 86% client retention during 2023, which we believe is among the best in our industry.

Goosehead's Digital Agent, a proprietary online quoting platform, allows clients to shop their home and auto insurance rates with top carriers.

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Clients can then bind these quotes through a short call with one of our local licensed agents with expertise in the client's specific market.

All client data is treated confidentiality with the client's privacy and security top of mind.

Unlike other online quoting platforms, Goosehead never shares the client's data without the client's permission and never sells it to a third party.

All client data is treated confidentially with the client's privacy and security top of mind.

Goosehead does not sell or share the client's data without the client's permission.

Agent perspective

Among the three largest captive insurance companies, State Farm, Farmers, and Allstate, there are over 100,000 captive agents in the United States, and these agents are facing some acute pain points in their businesses.

First, only having one carrier to sell leads to lower close rates and client retention as these companies lack options to move the business to another Carrier.

Among the three largest captive insurance companies, State Farm, Farmers, and Allstate, there are over 50,000 agents in the United States, and these agents face some acute pain points in their businesses.

First, only having

one carrier to sell leads to lower close rates and client retention as these companies lack options to move the business to another Carrier.

In addition, many agents will lose their ability to write certain lines of business in some areas due to underwriting rules from the carrier – this is especially true after a catastrophic loss in the agent’s city or county.

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Many “insuretech” carriers saw the complexity of working with traditional agents and have sought to build models that eliminate the role of the agent.

As they have grown, many have realized that 80% of the market still prefers to work with an agent (according to the Independent Insurance Agents & Brokers of America, Inc.), and that Goosehead allows them to reach that segment of the market without all the traditional complexity.

As they have grown, many have realized that the market still prefers to work with an agent (according to the Independent Insurance Agents & Brokers of America, Inc.), and that Goosehead allows them to reach that segment of the market without all the traditional complexity.

We now distribute for many of the insuretechs, increasing the breadth of our product portfolio.

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(2) our agents’ leveraging of Goosehead's sales blueprint and proprietary technology leading to higher levels of productivity in winning new business;

and (3) our service

centers’ ability to retain renewal business.

All our growth has been organic;

we have not relied on mergers or acquisitions.

and (3) our service centers’ ability to retain renewal business.

Furthermore, we are profitable.

Our Go-to-Market Strategy

Our business model allows both our corporate and franchise sales agents to concentrate on sales and marketing activities related to acquiring new clients and issuing new policies, thus growing New Business Revenue and Renewal Revenue more rapidly than in other systems.

Renewal Revenue more rapidly than in other systems.

Their primary marketing efforts are focused on establishing referral relationships with other financial services providers in their communities using our proprietary marketing strategy.

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The Digital Agent, available across the U.S., is powered by key data integrations and a proprietary database.

It automatically populates information about consumers’ homes and vehicles during the quoting process and combines that information with millions of data points from two decades worth of Goosehead expert agents’ quoting decisions and accumulated experiences.

It automatically populates information about consumers’ homes and vehicles during the quoting process and combines that information with millions of data points from two decades worth of Goosehead's expert agents’ quoting decisions and accumulated experiences.

Our model, which allows agents to focus on New Business Revenue, is highly differentiated from the traditional insurance agency model.

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Our agents are freed from the burden of ongoing service, and as a result, both corporate sales and franchise agents are substantially more productive than top performers in our industry as it relates to new sales.

Compared to the 2022 Best Practices Study, which uses 2021 industry data, corporate sales agents with more than three years of tenure averaged 4.1x as much New Business Production per Agent as the industry best practice during 2021.

Franchise sales agents with more than three years of tenure averaged 2.5x as much New Business Production per Agent (Franchise) as the industry best practice during 2021.

Compared to the 2023 Best Practices Study, which uses 2022 industry data, in 2023 and 2022, corporate sales agents with more than three years of tenure averaged 2.8x and 2.9x as much New Business Production per Agent, respectively, as the industry best practice.

Franchise sales agents with more than three years of tenure averaged 1.8x in 2023 and 1.8x in 2022 as much New Business Production per Agent (Franchise) as the industry best practice.

2023 New Business Revenue per agent by tenure ($000s)

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In 2023, New Business Production per Agent in corporate sales was $73 thousand for agents with less than 1 year of tenure and $118 thousand for agents with more than one year of tenure.

Including all producers in franchise sales in 2022, New Business Production per Agency was $50 thousand for agencies with less than 1 year of tenure and $130 thousand for agents with more than one year of tenure in Texas.

Outside of Texas during 2022, New Business Production per Agency was $40 thousand for agencies with less than 1 year of tenure and $77 thousand for agencies with more than one year of tenure.

Including all producers in franchise sales

in 2023, New Business Production per Agency was $38 thousand for franchises with less than 1 year of tenure and $88 thousand for franchises with more than one year of tenure.

Corporate sales

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We also generate Ancillary Revenue in the form of Contingent Commissions from Carriers related to the overall growth and loss performance of the Book of Business we have placed with them.

Corporate sales is comprised of employed sales agents located in 12 sales offices across Texas, Illinois, Colorado, Ohio, Nevada, and North Carolina.

Corporate sales is comprised of employed sales agents located in 11 sales offices across Texas, Illinois, Colorado, Ohio, Nevada, Florida, and North Carolina.

As of December 31, 2023, we had corporate sales offices operating in the following locations:

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Austin, Texas;

San Antonio, Texas;

Rosemont, Illinois;

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Englewood, Colorado;

Las Vegas, Nevada;

Orlando, Florida;

and Columbus, Ohio.

We expect to continue our expansion in 2023 within our existing markets.

In 2022, Goosehead began transitioning top corporate sales agents into franchise ownership.

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This distribution is composed of Franchisees and sales agents that they hire as employees in their franchised businesses.

Our Franchise Agreement has a ten-year term and governs the terms under which we operate together, among other things, defining the Initial Franchise Fee, Royalty Fees and other costs a Franchisee pays.

Our Franchise Agreement has a ten-year term and governs the terms under which we operate together, defining, among other things, the Initial Franchise Fee, Royalty Fees and other costs a Franchisee pays.

Franchisees have contractual rights to revenue related to the Book of Business during the term of their agreement, but we retain ultimate ownership over the policies written in each franchised business.

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Our franchise sales function has a unique value proposition to experienced agents who understand the limits and pain points of the traditional agency model:

• Franchise sales agents gain access to products from multiple Carriers in their markets, allowing the agents to better serve their clients and Referral Partners by providing choice.

• Franchise owners and their sales agents gain access to products from multiple Carriers in their markets, allowing the agents to better serve their clients and Referral Partners by providing choice.

Captive Agents typically can only sell products from one Carrier.

• Franchise sales agents can leverage our service centers to handle service requests and process renewals.

• Franchise owners and their sales agents can leverage our service centers to handle service requests and process renewals.

Most traditional agencies require their agents to handle client service and renewals which diminishes the time they can devote to winning additional new business and growing their agencies.

Traditional agencies can

become the victims of their own success as their increasing service burden crowds out time to sell new business.

• Franchise sales agents use our well-established and proprietary sales processes to win new business.

Traditional agencies can become the victims of their own success as their increasing service burden crowds out time to sell new business.

• Franchise owners and their sales agents use our well-established and proprietary sales processes to win new business.

Franchise sales agents are trained side-by-side with corporate sales agents to leverage our training program, to acquire product and Carrier knowledge and to utilize our technology and back office support.

Our corporate sales function continues its investment in the success of our franchise sales well past initial training in the form of ongoing sales coaching and mentoring, as well as serving as fertile recruiting ground for future regional territory managers within our franchise support team.

• Franchise sales agents benefit from lean startup costs as they do not require additional employees or a retail location to launch their agencies.

Our corporate sales function continues its investment in the success of our franchise sales well past initial training in

the form of ongoing sales coaching and mentoring.

The corporate sales function also serves as fertile recruiting ground for future regional territory managers within our franchise support team.

• Franchise owners benefit from lean startup costs as they do not require additional employees or a retail location to launch their agencies.

Captive Agents are often required to immediately hire two to three additional employees as support staff, lease a storefront location, and contribute a specific percentage of revenue toward an advertising budget.

Further, most fixed costs in a traditional agency (e.g., administrative costs, technology fees, training expenses and service costs) are diminished or eliminated in our franchise sales due to Goosehead’s scale, and we expect that fixed costs will continue to decrease as franchise sales grows.

• Franchise sales agents own an economic interest in their Books of Business.

• Franchise owners own an economic interest in their Books of Business.

The recruiting team seeks applicants who have demonstrated a strong capacity to win new business and a desire to own their own business.

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Compared to the 2022 Best Practices Study, franchise sales agents with more than three years of tenure averaged 1.8x as much New Business Production per Agent (Franchise) as the industry best practice.

Franchise sales agents with less than two years of tenure produced as much New Business Production per Agent (Franchise) as the industry best practice.

In franchise sales, we earn Core Revenue in the form of New Business Royalty Fees and Renewal Royalty Fees generated by the franchise location.

New Business Royalty Fees are set in the Franchise Agreements at 20% of commissions and Agency Fees received during the first term of the policy, and 50% of commissions every year the policy is renewed.

This economic relationship creates a mechanical step-up in revenue at the first renewal of each policy, creating strong revenue and margin expansion opportunities.

Cost Recovery Revenue consists of non-refundable Initial Franchise Fees, which compensate us for the training and onboarding efforts to launch a new franchise location, and Interest Income related to Franchisees which elect the payment plan option for their Initial Franchise Fee.

New Business Royalty Fees are set in the Franchise Agreements at 20% of commissions and Agency Fees received during the first term of the policy, and 50% of commissions every term the policy is renewed, including if the policy renewal is with a different carrier.

Cost Recovery Revenue consists of non-refundable Initial Franchise Fees, which compensate us for the training and onboarding efforts to launch a new franchise location, and Interest Income related to Franchisees that elect the payment plan option for their Initial Franchise Fee.

Ancillary Revenue consists of Contingent Commissions and Other Income.

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Premiums in franchise sales grew 37% during 2023.

As of December 31, 2022, we have 2,125 total franchises, including 1,413 franchises operating and 712 in implementation, a 1% decrease in total franchises and a 18% increase in operating agencies in 2022 compared to 2021.

As of December 31, 2023, we have 1,415 total franchises, including 1,226 franchises operating and 189 in implementation, a 33% decrease in total franchises and a 13% decrease in operating agencies in 2023 compared to 2022.

We have franchise locations either operating or signed in the following states, which cover over 99% of the US population:

Geographic footprint Operating or signed agencies

Geographic footprint Operating agencies

State December 31, 2023

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North Carolina 46

South Carolina 56

(1) Number of franchise locations include 712 franchises which are under contract but yet to be opened as of December 31, 2022.

Profitability of Corporate and Franchise Sales

Both corporate sales and franchise sales generate New Business Commissions and Agency Fees for efforts in identifying, placing, and making effective insurance coverage on behalf of our customers.

The Company earns 100% of New Business Commissions and Agency Fees generated by corporate sales and incurs fixed and variable compensation and benefits for corporate sales agents as well as other fulfillment and administrative costs.

Company also earns and records New Business Royalty Fees revenue equal to 20% of the New Business Commissions and Agency Fees generated by franchise sales and incurs fixed and variable fulfillment and administrative costs.

Each subsequent term that a policy renews, both corporate sales and franchise sales generate Renewal Commissions by assisting the customer to make effective a renewal policy that satisfies the customer’s current insurance coverage needs.

The Company earns 100% of Renewal Commissions generated by corporate sales and incurs fixed and variable compensation and benefits to corporate sales agents, which compensation is typically half the cost of New Business Commissions, as well as other fulfillment and administrative costs.

The Company also earns and records Renewal Royalty Fees revenue equal to 50% of the Renewal Commissions generated by franchise sales and incurs fixed and variable fulfillment and administrative costs.

As illustrated in the charts below, the Company’s earnings rate on commissions generated by corporate sales remains constant at 100% of the commission amount for each term a policy remains in force, while its earnings rate on commissions generated by franchise sales increases by 150% from the initial term of the policy to the first renewal term.

This increase in earnings rate from the initial term to the first renewal term results in built-in revenue growth for retained franchise sales.

The earnings rate then remains constant for all subsequent terms a policy is renewed for both corporate and franchise sales.

Our Service Centers

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handling client inquiries, facilitating the claims process with Carriers, accepting premium payments and processing policy changes and renewals.

Our service agents are also focused on selling additional insurance coverages to clients which account for additional New Business Revenue.

Our service agents are also focused on selling additional insurance coverages to clients, which result in additional New Business Revenue.

Our four separate service centers provide us with the ability to cover the U.S.

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We manage our service centers with the goal to maximize NPS, which we believe maximizes retention.

This differentiated level of service has enabled us to earn an NPS of 90 in 2022, a modest decrease from 91 in 2021, greater than highly regarded brands like Ritz Carlton and Nordstrom and 2.6x the 2021 industry average, according to Satmetrix.

This differentiated level of service has enabled us to earn an NPS of 92 in 2023, a modest increase from 90 in 2022, greater than highly regarded brands like Ritz Carlton and Nordstrom and 2.6x the 2022 industry average, according to Statista.

Our high degree of client satisfaction drove our 86% Client Retention rate during 2023, which we believe to be among the highest in the industry.

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As of December 31, 2023, our 10-year Total Written Premium CAGR was 44% and our 5-year premium CAGR was 42%.

Total Written Premium Total Written Premium by Term

Carrier provided information

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Premiums in the personal lines insurance market have grown consistently with underlying insured values and the overall economy.

Personal lines products Personal lines premium trends ($ billions)

Auto premiums Homeowners premiums

Personal lines products

Personal lines premium trends ($billions)

S&P Global Market Intelligence and National Association of Insurance Commissioners

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This has enabled our agents to generate approximately 2.8x as much new business as top performing personal lines agents after three years, according to the 2023 Best Practices Study.

Over the long-term, we believe our youth will enable us to avoid the shrinking workforce challenges that many of our competitors face and win an even larger market share from other agencies.

Over the long-term, we believe these factors will enable us to avoid the shrinking workforce challenges that many of our competitors face and win an even larger market share from other agencies.

According to Independent Insurance Agents & Brokers of America, Inc., 25% of independent agencies anticipate a change of control within the next five years.

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One of these efficiencies is service expenses.

Our 2021 service expenses as a percentage of gross commissions were 2.9x lower than the industry best practice according to the 2022 Best Practices Study, which uses 2021 data.

Our 2023 and 2022 service expenses as a percentage of gross commissions were 2.5x and 2.7x lower than the industry best practice according to the 2023 Best Practices Study, which uses 2022 data.

Despite our reduced service expense load, we are able to maintain best in class NPS scores and retention.

• Service centers drive both new and renewal business .

Our service centers handle all of our client service and renewals and have achieved a highly differentiated level of service as indicated by our NPS scores of 90 in 2022 and 91 in 2021—higher than many global service leaders such as Ritz Carlton and Nordstrom and 2.6x the P&C industry average, according to Satmetrix.

Our service centers handle all of our client service and renewals and have achieved a highly differentiated level of service as indicated by our NPS scores of 92 in 2023 and 90 in 2022.

Having such a skilled and fully licensed service team provides three tangible benefits to our business:

(1) allowing our agents to focus virtually all of their time on cultivating new Referral Partner relationships and winning new business (instead of preserving existing business), (2) generating strong Client Retention which provides a stable source of highly visible and recurring revenue and (3) providing opportunities to earn additional revenue as our service agents are highly trained in cross-selling and generating referral business.

(1) allowing our agents to focus virtually all of their time on cultivating new Referral Partner relationships and winning new business (instead of preserving existing business), (2) generating strong Client Retention that provides a stable source of highly visible and recurring revenue and (3) providing opportunities to earn additional revenue as our service agents are highly trained in cross-selling and generating referral business.

Our service agents typically originate significant amounts of New Business Revenue through cross-sale and referral generation.

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Jones worked in Ernst & Young’s Audit practice, primarily focused on financial services companies.

◦ Ryan Langston joined Goosehead Insurance in 2014 as Vice President and General Counsel and was promoted to Chief Legal Officer in 2022.

He is responsible for coordinating and leading legal activity and compliance.

Prior to joining Goosehead, Mr.

Langston was an attorney with Strasburger & Price, LLP where he represented businesses in commercial litigation and arbitration involving business dissolutions, theft of trade secrets, enforcement of noncompetition agreements, and breach of contracts.

◦ John O’Connor joined Goosehead Insurance in 2022 as General Counsel and, in that role, is responsible for all aspects of the company’s legal operations.

Prior to joining Goosehead, he spent fifteen years in private practice, including more than a decade with international law firm Weil, Gotshal & Manges, LLP.

He most recently served as general counsel for an Austin-based real estate development company.

Notably, while in private practice, Mr.

O’Connor served as outside counsel for Goosehead and has worked as an advisor to the company since 2019.

He holds an undergraduate degree from Loyola Marymount University, a master’s degree from Pepperdine University and received his J.D.

from Southern Methodist University, where he served as President of the SMU Law Review Association.

Key elements of our growth strategy

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We expect to continue growing our market share within these states as we sign and launch new franchises, and as those franchises ramp up their new business production over the course of 2-3 years.

As of December 31, 2022, 56% of our Franchisees had less than one year of tenure.

As of December 31, 2023, 15% of our operating franchises had less than one year of tenure.

Given the anticipated New Business productivity uplift that comes with more years of experience, and the elevated Royalty Fees on renewal business, we believe our franchise sales category is positioned for strong growth and margin expansion.

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Franchise tenure profile

(1) Number of franchise locations include 712 franchises which are under contract but yet to be opened as of December 31, 2022.

• Continue to develop innovative ways to drive productivity .

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• Maximize our effectiveness in managing renewal business .

We earn significantly larger Royalty Fees from our Franchisees for renewal business than on new business.

We earn significantly larger Royalty Fees from our Franchisees for renewal business than for new business.

Additionally, many of our largest expenses are significantly lower for renewal business such as compensation costs, risk management costs and client development costs.

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Markets & marketing

We primarily compete in the approximately $380 billion (according S&P Global Market Intelligence) U.S.

We primarily compete in the approximately $411 billion (according to S&P Global Market Intelligence) U.S.

personal lines P&C industry.

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Agents are encouraged to procure new clients through both relationships with Referral Partners and traditional channels (friends, family, client referrals, inbound inquiries and outbound inquiries), and we give them proprietary tools and technology to leverage our years of experience in successfully executing this go-to-market strategy.

The Company represents approximately 150 Carriers, of which 58 provide national coverage.

The Company represents over 150 Carriers, of which 60 provide national coverage.

During 2023, two carriers represented more than 10% of total revenue at 16% and 12%.

Franchise agreements

Franchise sales operate under a franchising model and each franchise is governed by a Franchise Agreement.

The Franchise Agreements for all existing franchises are nearly identical.

Franchise sales operates under a franchising model and each franchise is governed by a Franchise Agreement.

The Franchise Agreements for all existing franchises are substantially similar.

We have taken the position that we do not negotiate the terms of our Franchise Agreements in order to maintain uniformity within the system.

Each Franchise Agreement contains one ten-year term with two optional five-year renewal terms.

Each Franchise Agreement contains one ten-year term with either two optional five-year renewal terms or two optional ten-year renewal terms.

The Franchise Agreement may be terminated early if the Franchisee is violating a term of the contract, operating contrary to state law, or violating Goosehead procedures required by the operations manual.

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Franchisees are also required to pay a monthly Royalty Fee, which entitles the Franchisee to continue to operate.

The Royalty Fee is derived from a percentage of gross revenues on insurance policies in their initial (20%) and renewal terms (50%).

The Royalty Fee is derived from a percentage of gross commissions on insurance policies in their initial (20%) and renewal terms (50%).

Franchise owners are not entitled to an exclusive territory and may solicit sales from any location within the state in which they operate, subject to certain internal restrictions.

Franchisees who sign a Franchise Agreement after January 1, 2018, are required to pay a minimum monthly Royalty Fee if the Royalty Fee derived from the gross revenues on insurance policies does not exceed a specific amount.

Franchisees who sign a Franchise Agreement after January 1, 2018, are required to pay a minimum monthly Royalty Fee if the Royalty Fee derived from the gross commissions on insurance policies does not exceed a specific amount.

Total Franchises decreased by 33% to 1,415 in 2023 from 2,125 in 2022.

Total Franchises operating increased by 18% to 1,413 in 2022 from 1,198 in 2021.

Total Franchises operating decreased by 13% to 1,226 in 2023 from 1,413 in 2022.

The insurance brokerage business is highly competitive, and numerous firms actively compete with us for customers and insurance markets.

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A number of firms and banks with substantially greater resources and market presence compete with us.

Our brokerage operations compete with firms, which operate globally or nationally or are strong in a particular region or locality and may have, in that region or locality, an office with revenues as large as or larger than those of our corresponding local office.

Our brokerage operations compete with firms that operate globally or nationally or are strong in a particular region or locality, and may have in that region or locality an office with revenues as large as or larger than those of our corresponding local office.

We believe that the primary factors determining our competitive position with other organizations in our industry are the quality of the services we render, the technology we use, the diversity of products we offer, superior human capital, and the overall costs to our clients.

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Major slowdowns in the various housing markets Goosehead serves could impact our ability to generate new business.

Additionally, an increase in interest rates may decrease the number of home closing transactions, which could negatively impact our ability to generate new business.

Additionally, an increase in interest rates may decrease the number of home closing transactions, which could

negatively impact our ability to generate new business.

We experience seasonality and revenue related to the sale of insurance policies throughout the course of a calendar year that is tied to the seasonality of new home sales.

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Franchise regulation .

Offers and sales of franchises (so-called “pre-sale” franchise activities) are regulated in the United States by the Federal Trade Commission ("FTC") as well as certain states.

The FTC (through its “Franchise Rule”) requires franchisors to provide certain disclosures, in the form of a franchise disclosure document (an “FDD”) to prospective Franchisees.

One of the disclosure requirements is to include in the FDD audited financial statements of the franchisor (Goosehead Insurance Agency, LLC) or, if not the franchisor, an affiliate or parent of the franchisor who guarantees the franchisor’s obligations to its Franchisees.

Offers and sales of franchises (so-called “pre-sale” franchise activities) are regulated in the United States by the Federal Trade Commission ("FTC") and by certain state laws.

The FTC (through its “Franchise Rule”) requires franchisors to provide certain disclosures, in the form of a franchise disclosure document (“FDD”) to prospective Franchisees.

One of the required disclosures is to include in the FDD audited financial statements of the franchisor (Goosehead Insurance Agency, LLC) or, if not the franchisor, an affiliate or parent of the franchisor who guarantees the franchisor’s obligations to its Franchisees.

In order to include our consolidated financial statements in the FDD, we are required to guarantee Goosehead Insurance Agency, LLC’s current and future obligations to its Franchisees.

The Franchise Rule does not require a franchisor to register or file an FDD with the FTC before offering franchises.

Approximately twenty states also have pre-sale franchise or “business opportunity” laws and regulations that require franchisors to register with the state in some manner before that franchisor may offer or sell a franchise in that state, and in some cases to also provide prospective Franchisees with certain additional disclosures as part of the FDD.

Approximately twenty-four states also have “franchise relationship laws” that address post-sale aspects of the franchisor-franchisee relationship, such as prohibiting enforcement of certain franchise agreement provisions, requiring a certain notice or cure period before termination of a franchise agreement, and also defining what constitutes “good cause” for terminating the franchise agreement or denying a transfer or renewal of the agreement.

Certain states also have pre-sale franchise or “business opportunity” laws and regulations that require franchisors to register with the state in some manner before that franchisor may offer or sell a franchise in that state, and in some cases to also provide prospective Franchisees with certain additional disclosures as part of the FDD.

Some states also have “franchise relationship laws” that address post-sale aspects of the franchisor-franchisee relationship, such as prohibiting enforcement of certain franchise agreement provisions, requiring a certain notice or cure period before terminating a franchise agreement, and defining what constitutes “good cause” for terminating the franchise agreement or denying a transfer or renewal of the agreement.

Although we believe that our Franchise Agreements and our relationships with Franchisees generally have complied with franchise relationship laws, a failure to comply with those laws could result in civil liability or the company’s inability to enforce a Franchise Agreement, among other things.

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Nearly all states have insurance laws requiring personal property and casualty insurers to file rating plans, policy or coverage forms, and other information with the state’s regulatory authority.

In many cases, such rating plans, policy or coverage forms, or both must be approved prior to use.

In many cases, such rating plans and/or policy or coverage forms must be approved by the regulatory authority prior to use.

The speed with which an insurer can change rates in response to competition or in response to increasing costs depends, in part, on whether the rating laws are (i) prior approval, (ii) file-and-use, or (iii) use-and-file laws.

In states having prior approval laws, the regulator must approve a rate before the insurer may use it.

In states having file-and-use laws, the insurer does not have to wait for the regulator’s approval to use a rate, but the rate must be filed with the regulatory authority prior to being used.

A use-and-file law requires an insurer to file rates within a certain period of time after the insurer begins using them.

Eighteen states, including California and New York, have prior approval laws.

In states with prior approval laws, the regulator must approve a rate before the insurer may use it.

In states with file-and-use laws, the insurer does not have to wait for the regulator’s approval to use a rate, but the rate must be filed with the regulatory authority prior to being used.

In states with use-and-file laws, the insurer must file rates within a certain

period of time after the insurer begins to use them.

Under all three types of rating laws, the regulator has the authority to disapprove a rate filing.

While we are not an insurer, and thus not required to comply with state laws and regulations regarding insurance rates, our commissions are derived from a percentage of the premium rates set by insurers in conjunction with state law.

While we are not an insurer, and thus not required to file our own rating plans with the state's regulatory authority, our commissions are derived from a percentage of the premium rates set by insurers in conjunction with state law.

Data privacy regulation.

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In the United States, numerous federal and state laws, rules and regulations require insurers to protect the security and confidentiality of customer information, to regulate disclosures and disposal of customer information, and to notify customers about their policies and practices relating to the collection, use, retention, security, transfer, disclosure and other processing of customer information and other personal information.

For example, the NAIC Insurance Data Security Model Law, which has been adopted in some form by at least 22 states, and the New York State Department of Financial Services cybersecurity regulation, establish standards for data security and for the investigation of and notification to insurance commissioners of cybersecurity events.

In addition, the California Consumer Privacy Act, as modified by the California Privacy Rights Act, imposes significant compliance requirements on covered businesses that collect personal information on California residents.

The United States Congress, state legislatures, and regulatory authorities have considered and are expected to consider additional laws, rules and regulations relating to data, privacy, cybersecurity and other aspects of customer information, which will likely require us to devote additional significant operational resources and incur additional significant expenses for compliance and may also increase our exposure to risk of claims that we have not complied with all applicable data privacy and cybersecurity laws, rules and regulations.

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We will continue to strive for a one-of-a-kind company culture and offer a competitive compensation and benefits package, which includes health insurance, a 401(k) plan, an Employee Stock Purchase Program, and the potential for option awards.

As of December 31, 2022, we had approximately 1,426 full-time and 1 part-time employee.

As of December 31, 2023, we had approximately 1,415 full-time and no part-time employees.

Our Franchisees are independent businesses, and we do not control the essential terms and conditions of employment for their employees;

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Goosehead utilizes a training curriculum for all incoming recruits and supports ongoing professional development of our employees.

Twice a year Goosehead invites all employees to apply for an internal Leadership Development Program, where emerging leaders are selected based on their performance and demonstrated propensity for servant leadership.

Participants engage with important leadership principles, participate in leadership lessons from our executive team and complete an interdepartmental group project over a 6-month period.

We also conduct weekly webinars for both our corporate and franchise agents to provide ongoing training and mentoring.

We conduct weekly virtual webinars for both our corporate and franchise agents to provide ongoing training and mentoring.

Each week we highlight a key skill around our products, sales processes, or professional development.

We also host week-long onsite training courses at our corporate headquarters.

We also regularly reach out to our employees and franchise partners by conducting in-person town halls across various geographic locations in the United States.

This feedback loop is extremely valuable and often results in near real-time updates to our operating platform to deliver better service and business processes to our agent network - we made over 2,400 platform improvements in 2022 alone.

This feedback loop is extremely valuable and often results in near real-time updates to our operating platform to deliver better service and business processes to our agent network.

Employee Benefits and Compensation

We believe in a holistic and competitive compensation package that includes opportunities for bonuses and equity compensation, as well as access to our stock ownership program.

Goosehead employees are also eligible to be awarded incentive stock options under our Omnibus Incentive Plan, which is designed to motivate and reward key

employees to perform at the highest level and contribute significantly to our long term success, thereby aligning our employee incentives with the best interests of our shareholders.

Goosehead employees are also eligible to be awarded incentive stock options under our Omnibus Incentive Plan, which is designed to motivate and reward key employees to perform at the highest level and contribute significantly to our long term success, thereby aligning our employee incentives with the best interests of our shareholders.

Goosehead offers its employees a competitive health benefits package, including medical, dental, and vision insurance, as well as flex and health savings accounts, life insurance, short-term disability insurance, long-term disability insurance, accident insurance, critical illness insurance, and the opportunity to participate in our 401(k) retirement savings plan.

Under the 401(k), we match participants' contributions, which become vested over four years.

Diversity, Equity, and Inclusion

Workforce Diversity and Engagement

More than half of Goosehead's employees are women and over one-third of our workforce identify as racially diverse.

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Goosehead maintains strong Equal Opportunity and Anti-Harassment policies, and we are committed to the principles of openness, empathy, and respect in our workplace.

We contracted with a third-party solutions team to encourage and facilitate independent and timely reporting and investigation of alleged policy violations.

We contracted with a third-party solutions team to

encourage and facilitate independent and timely reporting and investigation of alleged policy violations.

Goosehead does not tolerate any form of discipline, reprisal, threats, intimidation, or other retaliatory conduct against an employee for making a good faith complaint of a perceived incident of discrimination or harassment or for cooperating in an investigation by the company or any federal, state, or local agency of such a complaint.

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These values are at the very center of what makes our company unique, defines our dynamic culture, and enables us to build a truly world class business.

It has resulted in a work force that is highly energized and motivated and a work environment that is meritorious, respectful, diverse and inclusive.

Our operating principals and values are articulated below.

It has resulted in a workforce that is highly energized and motivated and a work environment that is meritorious, respectful, diverse and inclusive.

Our operating principles and values are articulated below.

• Uncompromising integrity in all we do

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The full text of our code of business conduct and ethics policy is available on our website at https://ir.gooseheadinsurance.com/governance/documents-and-charters.

Any waiver of the code for directors or executive officers may be made only by our Board of Directors or a board committee to which the board has delegated that authority and will be promptly disclosed to our shareholders as

required by applicable U.S.

federal securities laws and the corporate governance rules of the Nasdaq Global Select Market.

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Such reports and other information filed by us with the SEC are available free of charge on our website at ir.gooseheadinsurance.com when such reports are made available on the SEC’s website.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information

regarding issuers that file electronically with the SEC at www.sec.gov.

The contents of these websites are not incorporated into this filing.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business