Yeah agreed. I would probably be less annoyed with minor factions if the units themselves weren't paper weights as well. I like your suggestion of set time contracts and us having the option of renewing or cancelling the contract. It's essentially how it was in Warband, but from the employer's perspective.To me minor factions / mercenary clans should be made stronger by owning top tier units for their exclusives - and the game should get a system for contracts where they become bound to you until the contract expires IF you choose not to renew it, making possible to bypass the renewal or abandon the contract if you go bankrupt or if they hate your guts.
The actual current function of those minor clans' to simply annoy the crap out of the player because they'll join the weakest faction, even if they are bankrupt and cannot pay, than zerg around in mini-parties raiding and attacking innocents & caravans endlessly... Currently the best option in vanilla is to simply murder all of them - problem solved. Issue is that for that to actually work you gotta murder all members of the clan simultaneously otherwise the game spawns substitutes, and you'll get arbitrarily karma bombed by TW's disgusting system for executions, realistically only a couple lords would get mad at that and the OG enemy faction should instead be thrilled... Like, killing those Ghilman or the Jawwal should make Aserai declare a holyday... Or ridding the empire from the Hidden Hand / Legion of the Betrayed / Eleftheroi (all three are traitors to the Empire in-lore) Instead we get the RNG karma bomb - which goes against the own game's lore...
To me it's just an intentional anti-player mechanic - TW has a lot of that bias rolling in BL.
The current system of hiring minor factions just serve as an unnecessary glue that's barely holding functionally dead kingdoms together. The snowballing is no longer much of an issue, just let us get rid of kingdoms which should've died out already. These kingdoms with not only their foot, but their whole torso being in the grave, yet surviving and annoying the crap out of the player is one of the problems with the game anyway.
The game has so many artificial barriers in it for no reason, which just takes the immersion out of the game for the players, such as the renown and clan tier system. Just let us get a +1 to party size for every 25 renown like in Warband (but maybe with a ceiling to max party size?) rather than these weird and unnecessary thresholds. Just let us get the max limit of companions from the get go, but limit it through the companions arguing with each other and having a higher chance of leaving the party if there are too many companions, where we could increase this effective maximum through charm and/or leadership. Let us have an "unlimited" amount of workshops but add a debuff to income which scales with the number of owned workshops like the tax inefficiency mechanic in Warband called idk "admin costs" or something, so we would have an effective maximum number which we could increase our overall number of effective workshops. I'm aware that this would be very broken in combination with the perk which gives +1 renown each day for every profitable workshop but they can maybe limit it at +5 renown at max a day or something.