Who is responsible for invoicing customers for all Recruiter Services provided by the Management Recruiters Franchise Business?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
anchisor a Non-Compliance Termination Fee.
- 5.6.12. Direct Deposit Service Fee. Franchisee shall pay to Franchisor the Direct Deposit Service Fee each month for Franchisor's processing of direct deposits for Franchisee.
- 5.6.13. Additional Fees. At Franchisor's discretion, any other amounts owed by Franchisee to Franchisor or any of its Affiliates, provided such amounts are disclosed to Franchisee.
6. REPORTING, INVOICING, PAYMENT, AND OTHER OBLIGATIONS
- 6.1. Recruiter Services Reporting, Invoicing, and Payment. Franchisee must report all Recruiter Services and Net Cash In of the Franchise Business for every Accounting Period in such a manner as may be directed by Franchisor, regardless of whether Franchisee has produced any Franchise Receivables or Net Cash In for the Accounting Period. Such reports must be made in compliance with the following terms and conditions:
- 6.1.1.Time of Reporting-Recruiter Services. Franchisee must report all Recruiter Services activity into Franchisor's payroll and billing system before the end of the Accounting Period immediately following the earlier of the following two dates: (i) the date on which the candidate is hired, and (ii) the date on which the end client owes a fee (e.g. for a retained search, the client may incur a fee to you before any candidate is located and hired).
- 6.1.2.Invoicing Recruiter Services. Franchisor shall invoice customers for all Recruiter Services provided by the Franchise Business and shall collect all payments made by
customers for all Recruiter Services provided by the Franchise Business (including liquidation/conversion fees paid for temporary employees hired on a regular basis by a customer). Franchisorshall receive the full benefit of any and all tax credits and benefits associated with the Recruiter Services provided by the Franchised Business. Franchisee shall endeavor in good faith to collect all billings made by Franchisor to customers of the Franchise Business and, in performing such work, shall apply substantially the same collection procedures and policies as are set forth in the Brand Standards Materials. The payments and Franchise Receivables that arise from all Recruiter Services provided by the Franchise Business shall be the exclusive property of Franchisor. Franchisee shall execute any assignments, authorizations or other documents as may be requested from time-to-time by Franchisor to allow it to accept, endorse and deposit all such remittances. The conversion of Franchise Receivables for Franchisee's uses for any period of time shall not be tolerated under any circumstances; indeed, converting Franchise Receivables, which are the property of the Franchisor, is considered to be larceny and punishable as a crime. If Franchisee cannot provide Franchisor an acceptable reason for the conversion of Franchise Receivables, Franchisor may report the matter to local law enforcement authorities.
6.1.3.Payment of Recruiter Share. As long as this Agreement remains in effect and Franchisee is not in default hereunder, Franchisor will pay to Franchisee Franchisee's Recruiter Share on the Wednesday following the end of the Accounting Period during which Franchisor actually collects of such Franchise Receivable. Franchisor has no obligation to pay any Franchisee Recruiter Share to Franchisee unless and until payment is received by Franchisor and all applicable fees set forth in Section 5 have been paid. If that Wednesday is a banking holiday, then Franchisor will pay to Franchisee's Recruiter Share on the next business banking day. Upon termination of this Agreement, the final payment of the Franchisee's Recruiter Share shall be withheld and retained by Franchisor until an equivalent amount of Franchise Receivables, plus an amount of Franchise Receivables equal to any unpaid Continuing Fees or other fees payable to Franchisor hereunder, have been collected and remitted to Franchisor at which time (or as soon as reasonably practicable thereafter): (i) Franchisor shall remit to Franchisee the Franchisee's Recruiter Share, if any, as determined in accordance with Section 5 hereof; and (ii) Franchisor shall assign to Franchisee any remaining Franchise Receivables.
6.2. Contract Staffing, Invoicing, Payment, and Other Obligations.
- 6.2.1.Employment of Temporary and Contract Employees. Temporary and contract employees shall be employees of the Franchisor or its designated Affiliate, and Franchisor or its designated Affiliate shall pay all Temporary and Contract Employee Expenses, subject to full reimbursement from collections of Franchise Receivables; provided that if any of the temporary employees or the Franchise Businessis subject to any fines, assessments, or penalties for any wrongful act related to federal, state or local employment requirements, such fines, assessments, or penalties shall be paid by Franchisee.
- 6.2.2.Billings and Collections-Contract Staffing Services. Franchisee shall enter all billing and payroll information for temporary and contract employees on a timely basis into Franchisor's billing and payroll system. Franchisor shall bill customers for all Contract Staffing Services provided by the Franchise Business and shall collect all payments made by customers for all Contract Staffing Services provided by the Franchise Business (including liquidation fees paid for temporary employees hired on a regular basis by a customer). Franchisor shall receive the full benefit of any and all tax credits and benefits associated with the Contract Staffing Services provided by the Franchise Business. Franchisee shall endeavor in good faith to collect all billings made by Franchisor to customers of the Franchise Business and, in performing such work, shall apply substantially the same collection procedures and policies as are set forth in the Brand Standards Materials. The payments and accounts receivable that arise from all regular and temporary employee placement services provided by the Franchise Business shall be the exclusive property of Franchisor. Franchisee shall execute any assignments, authorizations or other documents as may be requested from time-to-time by Franchisor to allow it to accept, endorse and deposit all such remittances. The conversion of Franchisor receivables for Franchisee's uses for any period of time shall not be tolerated under any circumstances; indeed, converting Franchisor receivables, which are the property of the Franchisor, is considered to be larceny and punishable as a crime.
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to the 2024 Management Recruiters Franchise Disclosure Document, the franchisor, HQ MRI Corporation, is responsible for invoicing customers for all Recruiter Services provided by the Management Recruiters franchise business. The franchisor also handles the collection of payments made by these customers. This is part of the back office services that Management Recruiters provides to franchisees. These services also include updates to and maintenance of the billing and payroll system, accounts receivable and cash receipts application services, basic accounting assistance, and collections assistance. However, the franchisee bears the ultimate responsibility for collections.
This arrangement means that Management Recruiters franchisees can focus more on the core aspects of their business, such as recruiting and placement, while the franchisor manages the invoicing and payment collection processes. This can streamline operations and reduce the administrative burden on franchisees. The payments and Franchise Receivables that arise from all Recruiter Services provided by the Franchise Business are the exclusive property of the Franchisor.
However, franchisees are expected to assist in the collection process. Franchisees must endeavor in good faith to collect all billings made by the Franchisor to customers of the Franchise Business and, in performing such work, shall apply substantially the same collection procedures and policies as are set forth in the Brand Standards Materials. Franchisees must also report all Recruiter Services activity into Franchisor's payroll and billing system before the end of the Accounting Period immediately following the earlier of the date on which the candidate is hired or the date on which the end client owes a fee.
It is important to note that the franchisor also provides invoicing for Contract Staffing Services. Temporary and contract employees are employees of the Franchisor or its designated Affiliate, and Franchisor or its designated Affiliate pays all Temporary and Contract Employee Expenses, subject to full reimbursement from collections of Franchise Receivables. The payments and accounts receivable that arise from all regular and temporary employee placement services provided by the Franchise Business are the exclusive property of Franchisor.