What is deducted from Gross Margin to calculate a Management Recruiters franchisee's Contract Staffing Share?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.3. Contract Staffing Continuing Fees, Uncollectibles, Collection Expenses, Marketing and Public Relations, Security Deposit. Following the end of each Accounting Period, Franchisee's Contract Staffing Share shall be calculated by deducting from Gross Margin the following amounts:
- the Contract Staffing Continuing Fees;
- to the extent that Contract Staffing Receivables remain uncollected beyond fortytwo (42) days after the invoice date ("Forty-Two Day Period"), a delinquency fee of one-half of one percent (½%) of the amount of such uncollected Contract Staffing Receivables for each fourteen (14) day period following said Forty-Two Day Period;
- the full-face amount of Contract Staffing Receivables that are either (i) declared uncollectible (and, thus, written off) during the Accounting Period or (ii) which remain uncollected beyond eighty-four (84) days after the invoice date;
- Franchisee's pro-rata share of all legal and other out-of-pocket collection expenses incurred by Franchisor related to Franchise Receivables;
- at Franchisor's discretion, any other amounts owed by Franchisee to Franchisor or any of its Affiliates, provided such amounts are disclosed to Franchisee;
- the Marketing and Public Relations Fee;
- the Back Office Services Fee; and
- 1% of Gross Funds until the entire Security Deposit is collected.
- 5.4. Contingent Continuing Contract Staffing Fee Credit, Recovery of Uncollectibles. Following the end of each Accounting Period, Franchisee's Contract Staffing Share shall be increased by the following amounts:
- Contingent Contract Staffing Continuing Fee Credit(s) billed during the applicable Accounting Period; and
- any payments that are received during the Accounting Period on account of Contract Staffing Receivables previously deemed uncollectible (or which remained uncollected beyond eighty-four (84) days after the invoice date).
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, a franchisee's Contract Staffing Share is calculated by deducting several items from the Gross Margin. These deductions include the Contract Staffing Continuing Fees, which are defined as the sum of 4.5% of Contract Staffing Payroll plus 18% of the Gross Margin for temporary and contract employee staffing.
Additional deductions from the Gross Margin include a delinquency fee of one-half of one percent (½%) of the amount of uncollected Contract Staffing Receivables for each fourteen (14) day period following a forty-two (42) day period after the invoice date, if the receivables remain uncollected. The full face amount of Contract Staffing Receivables that are declared uncollectible or remain uncollected beyond eighty-four (84) days after the invoice date are also deducted. Franchisee's pro-rata share of all legal and other out-of-pocket collection expenses incurred by Franchisor related to Franchise Receivables are deducted as well.
Management Recruiters also deducts, at its discretion, any other amounts owed by the franchisee to Management Recruiters or its affiliates, provided these amounts are disclosed to the franchisee. Further deductions include the Marketing and Public Relations Fee, the Back Office Services Fee, and 1% of Gross Funds until the entire Security Deposit is collected. However, the franchisee's Contract Staffing Share can be increased by Contingent Contract Staffing Continuing Fee Credits billed during the accounting period and any payments received on account of Contract Staffing Receivables previously deemed uncollectible.