How are the Recruiter Continuing Fees for Management Recruiters deducted?
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, the Recruiter Continuing Fees are deducted from the franchisee's Net Cash In account as part of the weekly calculation of the Franchisee's Recruiter Share. Net Cash In is defined as the sums billed by Management Recruiters to customers of the Franchise Business for Recruiter Services that are actually collected, less sales and use taxes collected for payment to the relevant taxing authority. Net Cash In also includes all receipts from any business the franchisee engages in that violates any obligation in the Franchise Agreement.
As long as the Franchise Agreement remains in effect and the franchisee is not in default, Management Recruiters will pay the franchisee their Franchisee's Recruiter Share on the Wednesday following the weekly Accounting Period, which ends on a Sunday, during which Management Recruiters actually collects the cash. If that Wednesday is a banking holiday, then Management Recruiters will pay the franchisee their Franchisee's Recruiter Share on the next business banking day.
The Recruiter Continuing Fee is calculated as a percentage of Net Cash In. The 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 $2,000,001. Prospective franchisees should carefully review Sections 5 and 6 of the Franchise Agreement, as referenced in the FDD, for a detailed discussion of the calculation of the Franchisee's Recruiter Share.