How is the Contract Staffing Continuing Fee calculated for Management Recruiters?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
ne dollars ($2,000,001.00).
The Contract Staffing Continuing Fee is an amount equal to the sum of 4.5% of Contract Staffing Payroll plus 18% of the Gross Margin for temporary and contract employee staffing of the Franchise Business. Contract Staffing Payroll means any gross wages funded by Hire Quest, L.L.C. or its affiliates on your behalf with respect to the temporary and contract employees.
- The Recruiter Continuing Fees are deducted from your Net Cash In account as part of the weekly calculation of the Franchisee's Recruiter Share. Net Cash In means sums billed by Franchisor to customers of the Franchise Business on account of Recruiter Services which are actually collected less only sales and use taxes collected for payment to the relevant taxing authority. Net Cash In also includes all receipts of your receipts from any business in which you engage in violation of any obligation in the Franchise Agreement. As long as your Franchise Agreement remains in effect and you are not in default, we will pay you your Franchisee's Recruiter Share on the Wednesday following the weekly Accounting Period (which ends on a Sunday) during which the Franchisor actually collects the cash. If that Wednesday is a banking holiday, then we will pay to you your Franchisee's Recruiter Share on the next business banking day.
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the Contract Staffing Continuing Fee is calculated as the sum of 4.5% of Contract Staffing Payroll plus 18% of the Gross Margin for temporary and contract employee staffing of the Franchise Business. Contract Staffing Payroll is defined as any gross wages funded by Hire Quest, L.L.C. or its affiliates on your behalf with respect to the temporary and contract employees. This fee is deducted from your Gross Margin account as part of the weekly calculation of the Franchisee's Contract Staffing Share.
Management Recruiters franchisees are paid their Franchisee's Contract Staffing Share on the Wednesday following the twenty-ninth day after the end of each weekly Accounting Period, which ends on Sunday. If that Wednesday is a banking holiday, the payment is made on the next business banking day. The FDD also indicates that Sections 5 and 6 of the Franchise Agreement contain a detailed discussion of the calculation of the Franchisee's Contract Staffing Share.
In addition to the Contract Staffing Continuing Fee, Management Recruiters franchisees also pay a Recruiter Continuing Fee, Marketing and Public Relations Fee, and Back Office Services Fee. If Contract Staffing Receivables remain uncollected for more than 42 days after the invoice date, franchisees must pay an overdue accounts fee of one-half percent of the amount of the uncollected receivables for each 14 day period following the 42 Day Period. Franchisees should carefully review the Franchise Agreement to fully understand how all fees are calculated and when they are due.