What assets related to the operations of the Philadelphia franchise are classified as held-for-sale in connection with the Dubin acquisition by Management Recruiters?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
In connection with the Dubin acquisition, certain assets acquired are still owned by us and classified as held-for-sale. When we acquired Dubin, there were two business lines. Dubin Workforce Solutions specialized in temporary labor assignments. The Dubin Group focused on permanent recruiting. We immediately sold the assets of Dubin Workforce Solutions to a new franchisee. There was not a franchisee identified for the Dubin Group portion of the business, however, we began marketing the franchise and classified it as held-for-sale immediately upon acquisition. We entered into an employment agreement with the seller to continue managing the business as a Company-owned location while it was held-for-sale. During 2023, we actively solicited but did not receive any reasonable offers to purchase the assets and, in response, have adjusted the price. The franchise continues to be actively marketed at a price that is reasonable given its results of operation. We expect to complete a sale of these assets within the next 12 months.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, certain assets acquired in connection with the Dubin acquisition, specifically those related to the operations of the Philadelphia franchise, are classified as held-for-sale. The Dubin Group, which focused on permanent recruiting, did not have an identified franchisee at the time of acquisition, leading Management Recruiters to market the franchise for sale immediately.
The FDD indicates that Management Recruiters sold the assets of Dubin Workforce Solutions, which specialized in temporary labor assignments, to a new franchisee. However, the assets of The Dubin Group were not sold immediately. As of the end of 2023, these remaining assets are still classified as held-for-sale, and the operating results are reported as "Income from discontinued operations, net of tax."
Management Recruiters has been actively trying to sell these assets and adjusted the price due to a lack of reasonable offers. As of the document's publication, they expect to complete the sale of these assets within the next 12 months, while continuing to operate the Philadelphia franchise as a company-owned location in the interim.