What is the approximate amount of franchise royalties attributable to the acquiree included in Management Recruiters' consolidated statement of income for the year ended December 31, 2023?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchise royalties attributable to the acquiree of approximately $107 thousand are included in our consolidated statement of income for the year ended December 31, 2023.
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The following table presents unaudited pro forma information (in thousands, except per share data) assuming (a) the acquisition of MRI had occurred on January 1, 2021, (b) all of MRI"s operations had been converted to franchises on such date, and (c) none of the other acquisitions discussed in this Note 2 had occurred. The unaudited pro forma information is not necessarily indicative of the results of operations that would have been achieved if the acquisition had in fact taken place on that date. Franchise royalties attributable to the acquiree of approximately $7.9 million are included in our consolidated statement of income for the year ended December 31, 2023.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, franchise royalties attributable to the acquiree of approximately $107,000 are included in their consolidated statement of income for the year ended December 31, 2023, related to the TEC transaction. Additionally, franchise royalties attributable to the acquiree of approximately $7.9 million are included in their consolidated statement of income for the year ended December 31, 2023, related to the MRI transaction.
These figures represent the royalties Management Recruiters earned from franchise locations that were acquired as part of business acquisitions. The FDD notes that the acquisition of MRI expedited Management Recruiters' growth into a new staffing vertical, expanded their national footprint, and grew their franchise base.
For a prospective franchisee, this information provides insight into how Management Recruiters grows and incorporates new franchise locations into its existing network through acquisitions. It also shows how these acquisitions contribute to the company's overall revenue through franchise royalties. Understanding the sources of Management Recruiters' revenue and growth strategies can help a potential franchisee evaluate the stability and future prospects of the franchise system.