What is Management Recruiters' expected timeframe for completing the sale of the Dubin Group assets?
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, the company anticipates completing the sale of the remaining assets related to The Dubin Group within the next 12 months. These assets are currently classified as held-for-sale, and the operating results are reported as "Income from discontinued operations, net of tax." Management Recruiters is actively marketing the franchise at a price deemed reasonable based on its operational results.
Management Recruiters acquired The Dubin Group, Inc., and Dubin Workforce Solutions, Inc. on February 21, 2022, for approximately $2.5 million. The acquisition included both executive placement services and commercial staffing operations in the Philadelphia metro area. Following the acquisition, Management Recruiters divided Dubin into separate business lines and immediately sold the assets of Dubin Workforce Solutions to a new franchisee.
However, a franchisee was not immediately identified for The Dubin Group portion of the business. As a result, Management Recruiters began marketing the franchise for sale immediately after the acquisition. In the interim, Management Recruiters entered into an employment agreement with the seller to manage the business as a company-owned location while it remained held-for-sale. Despite active solicitation, Management Recruiters did not receive any reasonable offers during 2023, leading to an adjustment in the asking price.
Prospective franchisees should note that the successful sale of these assets within the projected timeframe is not guaranteed. Factors such as market conditions and the attractiveness of the business to potential buyers could influence the actual timeline. It would be prudent for potential franchisees to inquire about the financial performance of The Dubin Group during its time as a company-owned location and the reasons for the lack of suitable offers in 2023.