WATCH: Franchisors Find Ways to Devour Own Franchisees

A CNN "superstar" iReporter vlogs today on how in these tough times franchisors are looking to compete and devour their own franchisees. Case in point, he states, is Sunday's news about Allstate insurance giant shedding 20% of its agent franchisees. (Editor's warning: Video starts automatically when accessing this story.)

An Allstate agent in central Ohio from 1967 until last month, Simpson said he was asked to either sell his agency by Jan. 1 or accept a $130,000 termination payment. Allstate was unhappy, Simpson said, because the number of policies in his portfolio fell 1.5 percent, or about 30 accounts. "I had negative growth, but the company's was down more than that," said Simpson, 68." – Chicago Tribune

Geico competes with its franchises too.

GEICO is another that directly competes with their local franchises by having a national 800 number. You can call GEICO national and get insurance within the local franchisee's  territory.

The iReport vlogger concludes, “Corporations are finding ways to cheat their franchise owners by circumventing them and going directly to the market and taking their customers.” And he asks:

This is the direction of corporations. Cut their own agents' throats and out-source as many jobs as possible to keep double digit returns for shareholders. Maybe the CEO of these companies should think longer term with more sustainable growth.” – CNN iReport

Note: The iReport vlog features a link to a Subway franchisee story on Blue MauMau.