May a Management Recruiters franchisee face competition from other franchisees?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
any circumstance without our prior written approval.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, from other channels of distribution or competitive brands that we or our affiliates control. Management Recruiters International, Inc., previously granted exclusive territories ("legacy territory(ies)") and some of those territories are still in effect. Existing members with legacy territories are under no obligation to permit another member to relocate in the legacy territory. The business is conducted largely via long distance and Internet so there is limited, if any, impact on your business from nearby members. Because recruiters work specific industries, you may in fact find that your closest competitor in the MRINetwork is located in a different part of the United States. With MRI's prior written approval, owners of single site locations are permitted to relocate anywhere in the United States subject to any legacy territory rights. If you choose to locate or relocate to a legacy territory, you may be required to pay a supplemental royalty to the existing member to obtain their consent. This is typically two percent (2%) of Net Cash-In and is dependent upon the decision of the legacy territory owner.
MRI and its affiliates reserve the right to use any channels of distribution, including the internet, to make sales of products or services in any territory/location while using the MRI trademarks or other trademarks not licensed to you.
Source: Item 12 — TERRITORY (FDD pages 40–43)
What This Means (2024 FDD)
According to Management Recruiters's 2024 Franchise Disclosure Document, franchisees may face competition from other franchisees. Item 12 clarifies that franchisees do not receive an exclusive territory. Management Recruiters retains the right to sell additional franchises within the same geographic location as an existing franchisee's site.
Furthermore, a Management Recruiters franchisee may face competition from other channels of distribution, outlets that Management Recruiters owns, or competitive brands that Management Recruiters or its affiliates control. The document notes that Management Recruiters International, Inc. previously granted exclusive territories, referred to as "legacy territories," some of which are still active. If a new franchisee chooses to locate or relocate to a legacy territory, they may need to pay a supplemental royalty, typically two percent (2%) of Net Cash-In, to the existing legacy territory owner to obtain their consent.
Additionally, HQ MRI Corporation has acquired SearchPath, another franchisor in the permanent placement industry. As a Management Recruiters franchisee, you will not have an exclusive territory, and SearchPath franchisees may solicit or accept orders for customers in your area. The franchisor states that it will attempt to resolve any conflicts between franchisees of different systems in a mutually beneficial manner, potentially through informal mediation, fee splitting, or referral agreements.