What is included in the definition of Net Cash In for Management Recruiters?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
Net Cash In means sums billed by Franchisor to customers of the Franchise Business on account of Recruiter Services which are actually collected less only sales and use taxes collected for payment to the relevant taxing authority. Net Cash In also includes all receipts of your receipts from any business in which you engage in violation of any obligation in the Franchise Agreement.
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, Net Cash In is a key term used to calculate the Recruiter Continuing Fee. Net Cash In is defined as the sums billed by Management Recruiters to customers for Recruiter Services that are actually collected. From this amount, only sales and use taxes collected for payment to the relevant taxing authority are deducted.
Additionally, Net Cash In includes all receipts from any business in which the franchisee engages that violates any obligation in the Franchise Agreement. This means that if a franchisee earns money through activities that are not in compliance with the agreement, those earnings are still considered part of Net Cash In for the purpose of calculating fees.
The Recruiter Continuing Fee is calculated based on the Net Cash In, with different percentages applied to different levels of Net Cash In. Specifically, the Recruiter Continuing Fee is 9% on the first $500,000 of Net Cash In, 7% on Net Cash In from $500,001 to $1,000,000, 5% on Net Cash In from $1,000,001 to $2,000,000, and 3% on Net Cash In that exceeds $2,000,000. This fee is payable weekly on the Wednesday following the collection of Net Cash In.