What happens to any remaining Franchise Receivables after termination of the Management Recruiters agreement and the final payment of the Franchisee's Recruiter Share?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon termination of this Agreement, the final payment of the Franchisee's Recruiter Share shall be withheld and retained by Franchisor until an equivalent amount of Franchise Receivables, plus an amount of Franchise Receivables equal to any unpaid Continuing Fees or other fees payable to Franchisor hereunder, have been collected and remitted to Franchisor at which time (or as soon as reasonably practicable thereafter): (i) Franchisor shall remit to Franchisee the Franchisee's Recruiter Share, if any, as determined in accordance with Section 5 hereof; and (ii) Franchisor shall assign to Franchisee any remaining Franchise Receivables.
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to the 2024 Management Recruiters Franchise Disclosure Document, upon termination of the franchise agreement, the final payment of the Franchisee's Recruiter Share will be withheld by Management Recruiters until an equivalent amount of Franchise Receivables, plus an amount equal to any unpaid Continuing Fees or other fees, have been collected and remitted to Management Recruiters.
After Management Recruiters receives the necessary funds, they will remit to the franchisee the Franchisee's Recruiter Share, if any, as determined in accordance with Section 5 of the agreement. Following this, Management Recruiters will assign any remaining Franchise Receivables to the franchisee.
In simpler terms, after the Management Recruiters franchise agreement ends, any outstanding payments owed to the franchisee from collected receivables will be paid out. Then, the rights to collect any remaining outstanding invoices (Franchise Receivables) from clients will be transferred from Management Recruiters back to the former franchisee.