What is the maximum handling fee that Management Recruiters may impose for failure to cooperate with unemployment claims?

According to Management Recruiters' 2024 Franchise Disclosure Document, if a franchisee fails to cooperate with Management Recruiters or its affiliates in handling unemployment insurance claims for temporary and contract employees, Management Recruiters may impose a handling fee. This fee is designed to compensate Management Recruiters for the additional administrative burden caused by the franchisee's lack of cooperation.

The maximum handling fee that Management Recruiters can charge is up to 150% of the unemployment claims in excess of state unemployment premiums paid. This calculation is made on a quarterly basis and is based on the unemployment claim experience of temporary or contract employees furnished by the franchise business during the term of the Franchise Agreement.

This fee structure means that a Management Recruiters franchisee could face significant costs if they do not properly manage and cooperate with unemployment insurance claims. It incentivizes franchisees to diligently handle these claims to avoid the penalty. Prospective franchisees should understand the importance of adhering to Management Recruiters' policies and procedures regarding unemployment claims to mitigate potential financial risks.