Your Own Franchise, Part 2 Assignment Example | Topics and Well Written Essays - 2000 words

Your Own Franchise, Part 2 - Assignment Example In this paper, the researcher will focus on issues like legal rights of the franchisee, financial obligations of franchisees, market segments for this franchise, factors involved in determining a site for the franchise, possible challenges and current phase of franchisee. Background of Allstate Insurance Company will be briefly discussed in the next section in order to develop situational framework for this paper. Allstate Insurance Company & Franchise Model Allstate Insurance Company was founded in 1931 and became publicly traded in the year 1993 (Allstate, 2013a; Bond, 2012). In USA, Allstate Corporation is regarded as largest publicly held insurance company that offers both personal lines property and casualty insurance services (Allstate, 2013a). As of 2011, total asset of the company is hovering over $125 billion while it was ranked 93 in Fortune 500 list. Allstate Insurance Company business model focuses on developing chain of franchise owners’ or entrepreneurial individ uals who are ready to act as â€Å"Allstate Exclusive Agents† and sell wide range of financial and insurance products of Allstate Insurance Company to customers such as auto insurance, property insurance and investment services (Allstate, 2013b; McCarthy, 2010). ... ce*, Allstate*, and Esurance† while promoting and marketing Allstate Insurance products like life insurance cover, retirement insurance cover, health insurance covers, fixed deposits, auto insurance, home insurance and fixed deposits (Bond, 2012). Legal Rights as a Franchisee In case of working under the trademark Allstate Insurance Company, individual agents holding the rights to sell Allstate Insurance products are being classified as franchisee owner while Allstate Insurance Company can be classified as franchisor. From 2000 onwards, Allstate Insurance Company converted all of its existing franchisee as independent operation in order to get tax advantages while legal rights of these franchisees are being governed through ‘independent contractor’ norms (Napaausa, 2013). Although, Allstate Insurance Company converted its franchisee owners to independent agents but job description remained unchanged. Therefore, legal rights of independent contractor or franchises r emained disregarded in case of franchisee-franchisor relationship for Allstate Insurance Company. As par Employee Agent (EA) agreement, franchisee owners are needed follow all the employee responsibilities on behalf of Allstate Insurance Company yet they would not be liable to get compensation like federal unemployment compensation or contract compensation (Napaausa, 2013). As par Section XVII, Section XVII.B.2 and Section I.A of the EA Agreement, franchisee contract can be terminated without payment of commission or non compliance of responsibilities mentioned by Allstate Insurance Company (Judiciary, 2012). Legal rights of franchisee is being dominated in EA Agreement while some undue favor has been given in favor of the franchisor such as minimum accountability for supporting actions of franchisee,