What is the Franchisee's obligation regarding collecting billings made by Management Recruiters to customers?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
vided by the Franchise Business and shall collect all payments made by
customers for all Recruiter Services provided by the Franchise Business (including liquidation/conversion fees paid for temporary employees hired on a regular basis by a customer). Franchisorshall receive the full benefit of any and all tax credits and benefits associated with the Recruiter Services provided by the Franchised Business. Franchisee shall endeavor in good faith to collect all billings made by Franchisor to customers of the Franchise Business and, in performing such work, shall apply substantially the same collection procedures and policies as are set forth in the Brand Standards Materials. The payments and Franchise Receivables that arise from all Recruiter Services provided by the Franchise Business shall be the exclusive property of Franchisor. Franchisee shall execute any assignments, authorizations or other documents as may be requested from time-to-time by Franchisor to allow it to accept, endorse and deposit all such remittances. The conversion of Franchise Receivables for Franchisee's uses for any period of time shall not be tolerated under any circumstances; indeed, converting Franchise Receivables, which are the property of the Franchisor, is considered to be larceny and punishable as a crime. If Franchisee cannot provide Franchisor an acceptable reason for the conversion of Franchise Receivables, Franchisor may report the matter to local law enforcement authorities.
6.1.3.Payment of Recruiter Share. As long as this Agreement remains in effect and Franchisee is not in default hereunder, Franchisor will pay to Franchisee Franchisee's Recruiter Share on the Wednesday following the end of the Accounting Period during which Franchisor actually collects of such Franchise Receivable. Franchisor has no obligation to pay any Franchisee Recruiter Share to Franchisee unless and until payment is received by Franchisor and all applicable fees set forth in Section 5 have been paid. If that Wednesday is a banking holiday, then Franchisor will pay to Franchisee's Recruiter Share on the next business banking day.
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the franchisee is obligated to endeavor in good faith to collect all billings made by Management Recruiters to customers of the Franchise Business. In performing this task, the franchisee must apply collection procedures and policies that are substantially the same as those set forth in the Brand Standards Materials.
Payments and accounts receivable that arise from both regular and temporary employee placement services are the exclusive property of Management Recruiters. The franchisee must execute any assignments, authorizations, or other documents that Management Recruiters requests to allow it to accept, endorse, and deposit all remittances.
The FDD emphasizes that converting Management Recruiters' receivables for the franchisee's use is strictly prohibited and considered larceny, potentially leading to legal action if an acceptable explanation cannot be provided. Management Recruiters will invoice customers for recruiter and contract staffing services and collect payments.