What is the latest point at which the initial franchise fee for Management Recruiters is due?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of expenditure | Amount* | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Initial Franchise Fee 1 | $40,000 | Up front or, in Franchisor's sole discretion, via weekly deduction from Franchisee's Share | The first 156 weeks following the Effective Date | MRI |
You must pay to us an initial franchise fee (the "Initial Franchise Fee") when you sign the Franchise Agreement.
The Initial Franchise Fee is $40,000.
This Initial Franchise Fee will be paid by you in cash contemporaneously with the execution of your Franchise Agreement.
In Franchisor's sole discretion, certain qualified franchisees may be allowed to pay the Initial Franchise Fee via a temporary deduction from the share we pay you pursuant to the franchise agreement equal to 2% of all Franchise Receivables (as that term is defined in the Franchise Agreement) until the entire Initial Franchise Fee is fully recovered.
The Initial Franchise Fee is fully earned by us when you sign the franchise agreement.
Fees paid are not refundable under any circumstances.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–26)
What This Means (2024 FDD)
According to Management Recruiters's 2024 Franchise Disclosure Document, the initial franchise fee of $40,000 is typically due when you sign the Franchise Agreement. However, Management Recruiters may, at its sole discretion, allow qualified franchisees to pay the initial franchise fee through a temporary deduction. This deduction would equal 2% of all Franchise Receivables until the entire $40,000 fee is recovered. If this option is granted, the fee would be paid over the first 156 weeks following the Effective Date.
This means that a prospective Management Recruiters franchisee might have the option to spread out the payment of the initial franchise fee over time, rather than paying it all upfront. This could significantly reduce the initial financial burden of starting the franchise. However, this option is not guaranteed and is subject to Management Recruiters's approval.
It's important to note that the initial franchise fee is fully earned by Management Recruiters when the franchise agreement is signed and is non-refundable under any circumstances. Therefore, a prospective franchisee should carefully consider their financial situation and the terms of the franchise agreement before signing.