Does the Management Recruiters agreement grant an exclusive territory to the franchisee?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
4.1. Location. This Agreement grants Franchisee the right to operate the Franchise Business from a single non-exclusive Location identified on Schedule 1, attached hereto, which must be approved by Franchisor in its sole discretion. Franchisee shall not operate or permit any other party to operate any business other than the Franchise Business out of the Location. Franchisee agrees and acknowledges that this Agreement does not grant Franchisee any exclusive territory.
Franchisee acknowledges that MRI, in the past, granted exclusive territories and some of these territories may still exist within the MRINetwork (the "Legacy Territories").
Franchisor will not deny relocation unless, in its sole judgment, such relocation would be a violation of another Franchisee's territorial rights.
In the event a Franchisee seeks to relocate into any of the Legacy Territories, Franchisee acknowledges that it may be required to make payment of a supplemental royalty over and above the Continuing Fees described in Section 5, which supplemental royalty will be paid, in full, by Franchisor to the owner of the Legacy Territory.
The decision whether a relocation into a Legacy Territory may occur is solely at the Legacy Territory owner's discretion.
of the foregoing, Franchisor reserves the right, without geographic limitation of any kind, to:
- sell products and services authorized for Franchise Businesses, using the Marks or other trademarks, service marks, and commercial symbols;
- operate and grant to others the right to operate Franchise Businesses under such terms and conditions as Franchisor deems appropriate;
- operate and grant franchises to others to operate Non-Mark Businesses, wherever located, specializing in the sale of products or provision of search and recruitment services, and/or temporary personnel placement services, including businesses that are the same or similar to your Franchise Business, and which i
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the franchise agreement does not grant franchisees an exclusive territory. The agreement allows the franchisee to operate their business from a single, non-exclusive location that Management Recruiters must approve.
While new Management Recruiters franchisees do not receive exclusive territories, the FDD notes that in the past, Management Recruiters granted exclusive territories, and some of these "Legacy Territories" may still exist within the MRINetwork. If a franchisee seeks to relocate into one of these Legacy Territories, they may be required to pay a supplemental royalty to the owner of the Legacy Territory, a decision that is solely at the Legacy Territory owner's discretion.
This lack of an exclusive territory means that Management Recruiters retains the right to sell products and services, operate, and grant franchises to others without any geographic limitations. This includes the right to operate and grant franchises for businesses that are the same or similar to the franchisee's business. A prospective franchisee should consider that Management Recruiters can authorize other franchisees to operate nearby, potentially creating competition.