What happens if a Management Recruiters franchisee does not meet the Minimum Annual Royalty?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
forcement authorities.
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- The minimum annual royalty of $12,000 begins on the first day of the first full calendar year after the day you sign your Franchise Agreement unless you enter the franchise agreement as a renewal of an existing MRINetwork franchise agreement. In that case, the minimum annual royalty obligation will begin immediately after signing the renewal franchise agreement. If the minimum annual royalty is not met through your payment of Continuing Fees in any given calendar year, you will be required to pay the difference in royalty between what you paid and the minimum annual royalty. If your franchise agreement is terminated for any reason prior to the expiration of the term, you will be responsible for payment of the minimum annual royalty for the remainder of the term, unl
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2024 FDD)
According to Management Recruiters's 2024 Franchise Disclosure Document, franchisees are subject to a minimum annual royalty. The minimum annual royalty is $12,000, and it begins on the first day of the first full calendar year after signing the Franchise Agreement, unless the agreement is a renewal, in which case it begins immediately.
If a Management Recruiters franchisee does not meet the minimum annual royalty through their payment of Continuing Fees in any given calendar year, they will be required to pay the difference between what they paid and the $12,000 minimum. This means that even if the franchisee's revenue is low, they are still obligated to pay at least $12,000 in royalty fees annually.
Furthermore, if the franchise agreement is terminated for any reason before the end of its term, the franchisee is responsible for paying the minimum annual royalty for the remainder of the term. This obligation can only be waived by Management Recruiters in writing, so franchisees should be aware of this potential liability upon termination.