How is 'Net Cash In' defined for the purpose of calculating the Recruiter Continuing Fee for Management Recruiters?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
The Recruiter Continuing Fees are deducted from your Net Cash In account as part of the weekly calculation of the Franchisee's Recruiter Share. 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. As long as your Franchise Agreement remains in effect and you are not in default, we will pay you your Franchisee's Recruiter Share on the Wednesday following the weekly Accounting Period (which ends on a Sunday) during which the Franchisor actually collects the cash. If that Wednesday is a banking holiday, then we will pay to you your Franchisee's Recruiter Share on the next business banking day. See
Section 5 and Section 6 of the Franchise Agreement for a detailed discussion of the calculation of your Franchisee's Recruiter Share
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 component in calculating the Recruiter Continuing Fee. For Management Recruiters, Net Cash In is defined as the sums billed by the franchisor to customers of the franchise business for recruiter services, specifically the amounts that are actually collected. From this collected amount, Management Recruiters deducts sales and use taxes that are collected for payment to the relevant taxing authority.
Net Cash In also encompasses all receipts from any business activities the franchisee engages in that violate the Franchise Agreement. This broad inclusion ensures that all revenue streams, even those derived from non-compliant activities, are subject to the Recruiter Continuing Fee.
The Recruiter Continuing Fees are calculated weekly and deducted from your Net Cash In account as part of the weekly calculation of the Franchisee's Recruiter Share. The Franchisee's Recruiter Share is paid out on the Wednesday following the weekly Accounting Period (which ends on a Sunday) during which Management Recruiters actually collects the cash, provided the Franchise Agreement is in effect and the franchisee is not in default. If that Wednesday is a banking holiday, then the payment is made on the next business banking day.