When is the Recruiter Continuing Fee payable to Management Recruiters?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
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ITEM 6: OTHER FEES
| Type of fee | Amount | Date Due | Remarks |
|---|---|---|---|
| Recruiter Continuing Fee | The royalty 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. See Note 1. | Payable weekly on Wednesday following collection of Net Cash In. See Note 2. | Net Cash In means the total amount of all accounts receivable which are generated by the Recruiter Services which are collected less only sales and use |
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the Recruiter Continuing Fee is payable weekly on Wednesday following the collection of Net Cash In. Net Cash In is defined as the total amount of all accounts receivable generated by Recruiter Services that are collected, less any sales and use taxes collected.
This means that as a Management Recruiters franchisee, you will need to ensure that you have systems in place to track Net Cash In and remit the Recruiter Continuing Fee each week. The fee is calculated as a percentage of Net Cash In, with the percentage decreasing as Net Cash In increases. Specifically, the royalty 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.
It's important to note that the Recruiter Continuing Fee is just one of several fees that Management Recruiters franchisees are required to pay. Other fees include the Contract Staffing Continuing Fee, the Marketing and Public Relations Fee, and the Back Office Services Fee. Franchisees should carefully review Item 6 of the Franchise Disclosure Document to understand all of the fees that they will be responsible for paying.
Management Recruiters deducts the Recruiter Continuing Fees from your Net Cash In account as part of the weekly calculation of the Franchisee's Recruiter Share. As long as your Franchise Agreement remains in effect and you are not in default, Management Recruiters 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 Management Recruiters will pay to you your Franchisee's Recruiter Share on the next business banking day.