Low-cost insurer makes magazine's top franchise list

Brownsville-based Pronto Insurance, which started in Harlingen in 1997 with one store and has expanded to more than 100 locations around the state, has made the list of Forbes Magazine's recently released ``Top 20 Franchises for the Buck.''

Forbes selected franchises based on five variables: Initial investment franchise fees plus equipment costs, total number of locations, closure rate, growth in the number of U.S. outlets in the last three years, and the level of training included in the franchise fee, which for Pronto franchisees is $32,000 to $100,000, depending on a number of variables. In 2010 and 2011, Pronto made the list of ``Top 50 Franchises for Minorities,'' compiled each year by the National Minority Franchising Initiative, and World Franchising Network's ``Top 25 Franchises for Hispanics.''

Sidney Williams, the company's director of franchising, said the Texas market for affordable auto insurance - a $13 billion industry in the state - is booming. Pronto's business model is aimed largely at the Hispanic market and drivers who have a hard time affording coverage through a traditional insurer. The company also offers homeowners' insurance, roadside assistance and tax preparation, and just introduced to its franchises a prepaid MasterCard debit card program.

Williams said Pronto plans to open new locations at the rate of three to five every few months and is actively seeking new franchisees. The company has 38 franchise locations operating or in development. Including company-owned sites, Pronto has more than 100 locations total, including nine in Brownsville and three in Harlingen. Williams said the company plans to grow its corporate division as well as its franchise division.

``We're taking a look at different marketplaces,'' he said. ``We've been developing a lot of locations inside the H-E-Bs. We'll continue to do that and those will continue to be corporate locations.''

Pronto is using franchises to ``fill in'' areas of the state where it already has a major presence - the Rio Grande Valley to Laredo, for instance. San Antonio has 20 locations, and the company has also opened a claims center in that city, though its headquarters remain in Brownsville. Pronto is gunning for the Dallas-Fort Worth market, where the company's first location is slated to open in 30 to 40 days, Williams said. He added that he's been in talks with potential franchisees who want to open multiple locations in the Dallas-Fort Worth metro area. Williams said the company has plenty of growing to do in Texas and isn't looking to other states - at least not yet.

``We certainly wouldn't count something else out of the equation down the road, but right now there's plenty of opportunity in Texas,'' he said. ``We just opened our second location in El Paso last summer. Between El Paso and Dallas, there's plenty of opportunity in those marketplaces, not to mention the rest of West Texas.''

TexasSure, the state's Uninsured Motorist Verification program, has spurred more drivers to buy insurance, at least to some degree. Enacted by the Legislature in 2008, two years ago the program began sending out letters to Texas residents whose vehicle registrations weren't matched by insurance policies. The Texas Department of Insurance reports that 21.6 percent of all vehicles in Texas lack insurance. In Cameron County - historically the least insured county in the state - the rate is more than 30 percent.

The affordable insurance market remains a rich vein that shows no sign of playing out any time soon, Williams said. Since 2005, Pronto's revenues have grown roughly 100 percent each year, a trend he believes will hold.

``We certainly see ourselves growing near that 100-percent clip for the next several years,'' Williams said. ``Our sales in the franchise division actually grew by more than 200 percent this last year, keeping relatively the same number of locations. The company as a whole grew at almost 100 percent from 2010 to 2011. Texas as a whole continues to grow. The Hispanic community is the most rapidly growing part of that base, so we have plenty of opportunity in the state.''