Each MA has the ability to tweak the contract and there is not a nationalized contract where they are all identical.
Therefore, I can't be 100% of the reading of your contract, but I can explain mine.
First the 25% is only on the GROWTH of the agency and is one of the reason that having the "frozen" amount in the contract is so important.
Say I came to SIAA earning $150,000 in commissions. This is my frozen amount that is subtracted from the monthly fees and the 25% departure fee. If I were to sell my agency or leave SIAA I would owe them 25% of the commissions in excess of the $150,000. Here is how it would apply.
1) I sell my agency: SIAA will buy my agency for twice the gross annualized commissions. Lets say that has grown to $250,000. My "penalty", for lack of better term, would be $250k-$150k = $100,000 X 25% = $25,000. SIAA will subtract the $25k from the ($250k X 2) $500,000 for a net proceed of $475,000.
2) Leave SIAA: The "penalty" is the same $25,000. Because I am keeping my agency, this payment is made directly to SIAA and there are payment schedules outlined in the contract. I believe there is a 20-25% down payment then monthly payments over 5 years for the balance. I admittedly am going from memory, so the payment schedule may not be accurate, but you get the gist of it.
For me personally, the benefits of SIAA have far outweighed any cost associated with joining.
In the first 7 months after joining I earned more in bonus than the admission fee. Now my bonus income is an additional 17% of my commissions. It's been about 6 months since I posted here that my 2009 income was 25% higher than my last year as a captive before switching to SIAA. My YTD 2010 income is up almost 35% from last year.
SIAA and my MA have delivered on everything they promised and I couldn't be happier. After being in the captive system for so long the thought of starting over and going independent was a scary, stressful decision. SIAA held my hand the enitre way, helped me get my contracts, E & O, comparative rater, and company specific training so I could hit the ground running. Because of their size, my bonus program and commission structure is better than I ever could have obtained on my own. They provided a valuable service to my agency in getting started, and continue to do so. Now they pretty much leave me alone. They ask that I attend 3 meetings per year. No production requirements, no hassling to sell life insurance or join marketing co-ops etc. If I have any questions, or need help of any kind, they are quick to respond. Of course, this says as much or more about my MA as it does SIAA, so investigate your MA and make sure you feel comfortable with them.
Best of luck