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Response Letter

 July 1, 2005

 Mr. Jim B. Rosenberg

 Senior Assistant Chief Accountant

 Securities and Exchange Commission

 450 Fifth Street, N.W.

 Washington, D.C. 20549

Re:
Brooke Corporation

 Form 10-K for the fiscal year ended
December 31, 2004

 Filed March 31, 2005

 File No. 001-31698

 Dear Mr. Rosenberg:

 Thank you for your letter dated June 24, 2005 with respect to your review of
our financial statements and related disclosures contained in the above-referenced filing. The following comments are numbered to correspond to the comments in your June 24 letter. We have included your comments in this letter prior to our response
thereto. Brooke Corporation offers the following responses. Please note that changes to disclosures are marked against the disclosures proposed in our letter dated May 31, 2005.

 Form 10-K for the fiscal year ended December 31, 2004

 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 Results from Operations

 Analysis by Segment, pages 32 – 43

 1. We have read your response to prior comment 2a. We understand that gains on sale of
businesses result from your acquisition and immediate resale of an insurance agency, financial service firm or funeral home. The amount of these gains represent the difference between consideration paid by you to sellers, which includes notes
payable at below-market interest, and the greater amount of consideration received by you from your franchisees. Please describe the typical form of consideration received by you from your franchisees. If this consideration includes notes
receivable, describe the principal terms of these instruments and, if applicable, the process, timing and frequency for including these notes in your securitization program. Describe the continuity of former agency owner/management during agency
acquisition, resale and integration with your franchise system. Tell us the current presence of former agency owner/management in your franchise system and describe how they are compensated.

 In response to comment 1, the following additional explanation is provided. The typical
form of consideration received from franchisees for the purchase of an insurance agency, financial services firm or funeral home is a loan totaling approximately 90% of the purchase price. Terms of the corresponding promissory note typically
provides for monthly payments of principal and interest with variable interest rates and payment amortization periods of up to 15 years.

 Prior to August 2004 all such loans were typically sold to participating lenders, and removed from our balance sheet, as soon as the loans were originated to
franchisees. In August 2004, we obtained a $50,000,000 line of credit from DZ Bank. This line of credit was structured by DZ to mirror our securitization process so that all loans funded through the DZ line of credit would qualify for
securitization. As such, the DZ line of credit holds insurance agency loans until the pool of loans is large enough to securitize. This unique line of credit arrangement is a “commercial paper conduit” designed specifically to hold assets
prior to securitization.

 The first loans were funded on the DZ line of
credit in August 2004 and all but two of the loans funded by DZ through February 2005 were included in the March 2005 securitization. We plan to securitize DZ line of credit

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balances approximately once every six months. We completed a securitization in June 2004 just prior to obtaining the DZ line of credit in August 2004, and
completed another securitization in March 2005, approximately seven months after starting the DZ relationship. Another securitization is planned prior to the end of 2005.

 The cooperation of former agency owners during conversion into our franchise system is important primarily because they are expected to
introduce the new owner to their customers and to otherwise promote the new owner to their customers. However, in virtually all circumstances, the former owner is not employed by the new owner or by us. It has been our experience that a former
owner’s presence in a franchisee’s office can be disruptive and confusing to employees. We estimate that less than 5% of our franchisees continue to employ former owners. In the unusual circumstance that former owners are employed by
franchisees, they are usually paid a share of commissions for insurance policies written or, in some instances, paid a monthly salary.

 2. We note that the amounts presented in the disclosure proposed in your response to prior comment 2A did not aggregate to the income statement caption, gain on sale
of businesses. Also, the 2004 gain on sale from deferred payments disclosed in the table differs from related disclosure in the first paragraph of your proposed disclosures. Please provide MD&A disclosure that is internally consistent and
integrated with the applicable financial statement captions for each year presented.

 In response to comment 2, disclosures have been added as follows to clarify that gains on sale of businesses as recorded on the applicable financial statement caption includes gains on the sale of inventoried
stores in addition to gains on the sale of company owned stores and from deferred payments. The 2004 gain on sale of businesses totaled $5,261,000 and was comprised of $810,000 in deferred payment gains, $4,270,000 in company store gains and
$181,000 in inventory store gains. The amount of gain on sales of business from deferred payments noted in the first paragraph of the proposed disclosures has been changed to $810,000 so that it corresponds with the related table.

 Gains on Sale of Businesses – Inventoried Stores As noted above, acquired
businesses are typically sold on the same day as acquired for the same nominal price paid to the seller. However, this is not always the case and businesses are occasionally held in inventory. As such, gains and losses are recorded when an
inventoried business is ultimately sold and carrying values of inventoried businesses are adjusted to estimated market value when market value is less than cost. As a result, gains on sale resulting from the sale of inventoried businesses resulted
in a profit of $181,000 in 2004, a loss of $260,000 in 2003 and loss of $71,000 in 2002.

 3. We have read your responses to prior comments 2d and 11. It appears that your income statement presentation should be revised so that interest income is presented separately from participating interest expense.
Please tell us your basis under GAAP for this net presentation.

 In
researching our response to comment 3, we did not find any specific basis under GAAP for presenting interest income separately from participating interest expense. Absent specific GAAP guidance, we have presented interest income and expense in
accordance with: (1) an SEC comment letter dated May 30, 2002 which stated that “The Statement of Income should not report interest income on loans that the Registrant does not own. Please delete the ‘participating interest expense’
line item and report interest income of $418,226 and $289,190, respectively.” and (2) an SEC comment letter dated July 30, 2002 which stated to “Please present $418,226 and $289,190 as the ‘Interest Income (Net)’ amounts pursuant
to our prior comment 21. The amount should be the difference between interest income and participating interest expense.”

 4. Please refer to your response to prior comment 3. Please address the following:

•

Please tell us your basis under GAAP for netting the franchisees’ use of your sale/service centers against commissions owed to franchisees. Explain to us why the additional
share of commissions received by Brooke Franchise for the use of your sale/service centers is not considered rental income.

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 In researching our response to the first bullet point under comment 4, we did not find any specific basis under GAAP
for presenting the income from sales/service center fees. We believe that classifying sales/service center fees as rental income exaggerates our total revenues. However, we also note that the effect of netting sales/service center fees against
commissions owed to franchisees may make analysis of commission margins more confusing. Therefore, absent specific GAAP guidance, we have set up a liability for sales/service center fees to which the specific expenses incurred to operate the
sales/service centers would be applied. Although not directly applicable, this is the presentation outlined in paragraph 14 of SFAS 45 for agency relationships. The result of this reclassification increases commission expense and reduces other
operating expenses by $2,339,000, $1,062,000 and $829,000 in 2004, 2003 and 2002, respectively. We have changed our financial reports accordingly.

•

Please expand your disclosure to clarify how you determine the allocation of initial franchise fees between basic services and Buyers Assistance Plan. Clarify why only the amount
in excess of the initial franchise fee for $125,000 is allocated to the Buyers Assistance Plan. Tell us how your accounting complies with paragraph 13 of SFAS 45 and if the franchisee has commenced operations at the time these services are provided.

 In response to the second bullet point under comment 4,
we have expanded our disclosures as follows to clarify how we determined the allocation of initial franchise fees between basic services and Buyers Assistance Plans. Our accounting for BAP related initial franchise fees complies with paragraph 13 of
SFAS 45 because all consulting services are substantially performed when initial franchise fees are paid at closing. Franchisees commence operations on the closing date which is the date by which virtually all of the BAP related services are
provided.

 Initial Franchise Fees for Basic Services
A certain level of basic services is initially provided to all franchisees, whether they acquire an existing business and convert into a Brooke franchise or whether they start up a new Brooke franchise. These basic services include services
usually provided by other franchisors, including a business model, use of a registered trade name, access to suppliers and license for an internet based management system. The amount of the initial franchise fees typically paid for basic services is
currently $125,000. We expect the initial franchise fee rate for basic services to increase as demand for access to our trade-name, suppliers and business model increases.

 Prior to the fourth quarter of 2003, our franchises were typically conversions of acquired businesses and the initial
franchise fee for basic services was typically waived because we believed that our franchise operations and trade name were not sufficiently established for franchisees to pay initial franchise fees for our basic services. Prior to the fourth
quarter of 2003, our initial franchise fees were attributed to inspection reports and other specific buyers assistance services. However, as our franchise network has grown, our basic franchise services have become more valuable to our franchisees
and we have been able to charge for these services.

 The value
of our basic franchise services was demonstrated when we began selling start up, or de novo, franchises in the fourth quarter of 2003. These franchisees did not require any specific buyers assistance services, but did require basic franchise
services such as use of a registered trade name, supplier access and a proven business model. Prior to the first quarter of 2004, we had one start up franchisee. In 2004, we added 41 start up franchisees, demonstrating the value of our basic
services. Therefore, when we introduced our start up franchise program in the fourth quarter of 2003, Wwe began allocating a portion of the initial franchise fees paid by conversion franchisees to basic services
because start up franchisees willingly paid us initial franchise fees for basic services. Correspondingly, the amount of this allocation was based on the amount of initial franchise fees typically paid by a start up franchisee. when
we introduced our start up franchise program in the fourth quarter of 2003.

 Initial franchise fee revenues for basic services increased $8,370,000 in 2004 to $8,795,000 and was $425,000 in 2003. For the reasons outlined above, prior to 2004, most initial franchise fees for basic services

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were accounted for as part of our initial franchise fees for buyers assistance plans (see Initial Franchise Fees for Buyers Assistance Plan below). None of
the initial franchise fees collected by Brooke Franchise in 2002 was for basic services. Revenues from initial franchise fees for basic services are recognized immediately because Brooke Franchise has no continuing obligation.

 Initial franchise fees for basic services are typically assessed once for
each franchisee even though some franchisees operate multiple locations. A total of 156, 65 and 55 new franchise locations were added in 2004, 2003 and 2002, respectively. Out of these total franchise locations, 41, 1, and 0 were start up franchise
locations added in 2004, 2003 and 2002, respectively. In 2005, our strategy is to decrease our dependence on acquiring and converting new franchise locations into our system, and to significantly increase the number of start up locations relative to
the number of new conversion franchise locations. Therefore, we expect initial franchise fees for basic services to increase at a faster rate than initial franchise fees for buyers assistance plan services.

 Initial Franchise Fees for Buyers Assistance Plans The amount of the
total initial franchise fees for all initial services typically varies based on the level of additional assistance provided by Brooke Franchise, which is largely determined by the size of the acquisition. We typically base our initial franchise fees
on the estimated revenues of the acquired business. All initial franchise fees are paid to Brooke Franchise when an acquisition closes. We allocate initial franchise fees collected in excess of $125,000 to initial franchise fees for buyers
assistance plans. As noted above, the amount of this allocation is based on the amount of initial franchise fees typically paid by a start up franchisee. Initial franchise fees are allocated first to basic services because basic services are the
first requirement for all franchise relationships.

 The
most significant part of Brooke Franchise’s growth comes from acquisitions of existing businesses that are subsequently converted into Brooke franchises. Brooke Franchise provides assistance regarding the acquisition and conversion of
businesses such as inspection report compilation, operations analysis and marketing plan development. Initial franchise fees for buyers assistance plans decreased $25,000 in 2004 to $8,122,000 and increased $4,193,000, or 106%, to $8,147,000, in
2003. As noted above, beginning in the fourth quarter of 2003, we began to categorize a significantly greater share of initial franchise fees as initial franchise fees for basic services. As a result, initial fees for buyers assistance plans for
2004 were flat in comparison to 2003; however, total initial fees increased significantly in 2004. Combined together, initial franchise fees for basic services and initial franchise fees for buyers assistance plans were $16,917,000 in 2004 compared
to $8,572,000 in 2003, an increase of 97%. The increase of initial franchise fees for buyers assistance plans in 2003 resulted from continued expansion of Brooke Franchise’s franchise operations and the corresponding increase in business
acquisitions and franchise conversions by Brooke franchisees.

 The Buyers Assistance Plan is designed to assist a franchisee in inspecting the agency assets to be acquired. The BAP includes an inspection report, an operations report, and a marketing report, all of which are to be delivered on or prior
to closing. As such Bro