Are Management Recruiters franchisees required to hire anyone to work with them in the Franchised Business?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
e will be no expense.
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- You are not required to hire anyone to work with you in the Franchised Business, although we encourage you do so.
- a. Researcher: If you hire a Researcher, this sum represents our estimate of working capital for a three-month period. We assume that the office has no cash receipts during this period. No one can predict when or whether any particular office will first receive cash receipts. Salaries may vary by city and state. Salary used for this calculation is $12/hr. and reflects part-time to full-time status.
- b. Account Executive and/or a Project Coordinator: If you hire an AE and/or PC, this sum represents our estimate of working capital for a three-month period. We assume that the office has no cash receipts during the period because no one can predict when or whether any particular office will first receive cash receipts. Salaries may vary by city and state. Salary used for this calculation is a $3,000/month draw an
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–26)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, franchisees are not required to hire anyone to work with them in the Franchised Business, although Management Recruiters encourages them to do so. The FDD provides estimates of working capital needed for three-month periods if a franchisee chooses to hire staff such as a Researcher, Account Executive (AE), or Project Coordinator (PC). These estimates assume the office has no cash receipts during this initial period, as it is difficult to predict when an office will first receive cash. Salaries may vary by city and state. The salary used for the Researcher calculation is $12/hr, reflecting part-time to full-time status. The salary used for the AE and/or PC calculation is a $3,000/month draw, reflecting full-time status.
The estimated initial investment table includes line items for salaries, with ranges from $0 to $6,240 for a Researcher and $0 to $9,000 for an Account Executive or Project Coordinator. The low end of the range assumes no employees are hired within the first three months, while the high end assumes three full-time employees are hired within the same period. These salary costs are listed as "as incurred" and "at your discretion," further emphasizing that hiring is optional.
The FDD also includes a line item for workers' compensation insurance, but notes that these expenses are dependent on the number of employees, if any, a franchisee has. This reinforces the fact that franchisees have the option to operate without employees, although the franchisor encourages hiring staff. A prospective franchisee should consider the costs and benefits of hiring staff versus operating independently when making their business plan.