Can Management Recruiters sell additional franchises within the geographic location of a franchisee's site?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
Members who purchase a franchise receive a single site non-exclusive location. There are no minimum territorial rights under this franchise opportunity. There are no restrictions placed on you for soliciting and conducting your franchised business anywhere in the world.
MRI can sell additional franchises within the geographic location of your site. We are not obligated to compensate you for soliciting and/or conducting business within your location while using our principal trademark(s) or any other trademarks. You may not relocate your office under any circumstance without our prior written approval.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, from other channels of distribution or competitive brands that we or our affiliates control. Management Recruiters International, Inc., previously granted exclusive territories ("legacy territory(ies)") and some of those territories are still in effect. Existing members with legacy territories are under no obligation to permit another member to relocate in the legacy territory. The business is conducted largely via long distance and Internet so there is limited, if any, impact on your business from nearby members. Because recruiters work specific industries, you may in fact find that your closest competitor in the MRINetwork is located in a different part of the United States. With MRI's prior written approval, owners of single site locations are permitted to relocate anywhere in the United States subject to any legacy territory rights. If you choose to locate or relocate to a legacy territory, you may be required to pay a supplemental royalty to the existing member to obtain their consent. This is typically two percent (2%) of Net Cash-In and is dependent upon the decision of the legacy territory owner.
Source: Item 12 — TERRITORY (FDD pages 40–43)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, franchisees receive a single site non-exclusive location, and there are no minimum territorial rights associated with the franchise. This means that franchisees do not receive an exclusive territory. Management Recruiters retains the right to sell additional franchises within the same geographic location as an existing franchisee's site.
This lack of territorial exclusivity means that a Management Recruiters franchisee may face competition from other franchisees, company-owned outlets, or other channels of distribution, including competitive brands controlled by Management Recruiters or its affiliates. The document specifies that Management Recruiters is not obligated to compensate franchisees for business solicited or conducted within their location using the company's trademarks.
The FDD also mentions legacy territories that were previously granted, which are still in effect. If a franchisee chooses to relocate to a legacy territory, they may be required to pay a supplemental royalty, typically two percent (2%) of Net Cash-In, to the existing legacy territory owner to obtain their consent. This is dependent on the legacy territory owner's decision. The business is conducted largely via long distance and Internet so there is limited, if any, impact on your business from nearby members. Because recruiters work specific industries, you may in fact find that your closest competitor in the MRINetwork is located in a different part of the United States.