What must happen before Management Recruiters remits the Franchisee's Share after termination of the agreement?

According to Management Recruiters' 2024 Franchise Disclosure Document, after the termination of the franchise agreement, Management Recruiters will withhold the final payment of the Franchisee's Share. This payment will be retained until an equivalent amount of Franchise Receivables, plus an amount of Franchise Receivables equal to any unpaid Continuing Fees or other fees payable to Management Recruiters, have been collected and remitted to Management Recruiters.

Once the equivalent amount of Franchise Receivables and any unpaid fees are collected and remitted, Management Recruiters will remit to the franchisee the Franchisee's Share, if any, as determined in accordance with Section 5 of the agreement. Additionally, Management Recruiters will assign to the franchisee any remaining Franchise Receivables.

In practical terms, this means that a franchisee will not receive their final share payment immediately upon termination. Instead, the franchisee's final payment is contingent upon Management Recruiters collecting outstanding receivables and ensuring all fees owed to them are paid. This process protects Management Recruiters' financial interests by ensuring that all outstanding obligations are settled before the franchisee receives their final payment. Franchise Receivables are defined as all receivables generated at the Franchisee's Location(s), which receivables shall be the exclusive property of the Franchisor including, without limitation, all Contract Staffing Receivables and all Recruiter Receivables.