What is a Management Recruiters 'Legacy Territory'?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that MRI, in the past, granted exclusive territories and some of these territories may still exist within the MRINetwork (the "Legacy Territories").
Franchisor will not deny relocation unless, in its sole judgment, such relocation would be a violation of another Franchisee's territorial rights.
In the event a Franchisee seeks to relocate into any of the Legacy Territories, Franchisee acknowledges that it may be required to make payment of a supplemental royalty over and above the Continuing Fees described in Section 5, which supplemental royalty will be paid, in full, by Franchisor to the owner of the Legacy Territory.
The decision whether a relocation into a Legacy Territory may occur is solely at the Legacy Territory owner's discretion.
- 4.3.1.Relocation Amendment.
If Franchisee's request is approved, Franchisee agrees to sign a relocation amendment identifying any terms or conditions of the relocation and confirming the new location for the Franchise Business.
Franchisee's relocation will be at Franchisee's sole expense.
In the event of a relocation, Franchise will, prior
- to the relocation, remove any signage or other property from the original Location which identified the original Location as part of the System.
- 4.3.2. Supplemental Royalty. If Franchisee relocates the Franchise Business without Franchisor's approval, Franchisee will reimburse Franchisor for any supplemental royalty Franchisoris required to pay to the Legacy Territory owner for the remaining term of this Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, a 'Legacy Territory' refers to exclusive territories that Management Recruiters granted in the past, some of which may still exist within the MRINetwork. This means that some existing franchisees may have territorial rights that new franchisees must respect.
If a new Management Recruiters franchisee wishes to relocate their franchise into one of these Legacy Territories, they may be required to pay a supplemental royalty. This additional royalty would be paid by Management Recruiters to the owner of the Legacy Territory. The decision to allow a relocation into a Legacy Territory is solely at the discretion of the Legacy Territory owner.
If a Management Recruiters franchisee relocates without the franchisor's approval and a supplemental royalty is required to be paid to the Legacy Territory owner, the franchisee will be responsible for reimbursing Management Recruiters for that supplemental royalty for the remaining term of the Franchise Agreement. This highlights the importance of obtaining franchisor approval before relocating, especially if there's a chance of encroaching on a Legacy Territory.