  The general gauge-invariant photoproduction formalism given by Haberzettl is
applied to kaon photoproduction off the nucleon at the tree level, with form
factors describing composite nucleons. We demonstrate that, in contrast to
Ohta's gauge-invariance prescription, this formalism allows electric current
contributions to be multiplied by a form factor, i.e., they do not need to be
treated like bare currents. Numerical results show that Haberzettl's gauge
procedure, when compared to Ohta's, leads to much improved $\chi^2$ values.
Moreover, predictions for the new Bonn SAPHIR data for $p(\gamma,K^+)\Lambda$
are given.
