What are the specific conditions under which a Management Recruiters franchisee might be required to relocate their franchise to a different location (Item 12), and what are the associated costs and implications?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
g 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.
MRI and its affiliates reserve the right to use any channels of distribution, including the internet, to make sales of products or services in any territory/location while using the MRI trademarks or other trademarks not licensed to you. MRI is not required to compensate franchisees for soliciting or conducting business within any territory/location.
The office location is subject to our reasonable approval, which will be based on the size of the office and the nature, location and quality of the building in which you want to locate. You may relocate your office as you choose, subject to our reasonable approval, which will be based on the same considerations.
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, a franchisee may need to relocate if they wish to move their office, but relocation is contingent upon receiving prior written approval from Management Recruiters. Approval for relocation can be denied if the new location infringes upon the legacy territory of an existing franchisee who possesses exclusive territorial rights. If a franchisee relocates without Management Recruiters' approval, they will be responsible for reimbursing Management Recruiters for any supplemental royalty that Management Recruiters is required to pay to the legacy territory owner for the remaining term of the Franchise Agreement. The franchisee bears the sole expense for the relocation. Prior to relocating, the franchisee must remove any signage or property from the original location that identified it as part of the Management Recruiters system.
If a Management Recruiters franchisee seeks to relocate into a Legacy Territory, they may be required to pay a supplemental royalty in addition to the Continuing Fees outlined in Section 5 of the FDD. This supplemental royalty is paid by Management Recruiters to the owner of the Legacy Territory. The decision to allow a relocation into a Legacy Territory is at the sole discretion of the Legacy Territory owner. If the relocation request is approved, the franchisee must sign a relocation amendment that identifies any terms or conditions of the relocation and confirms the new location for the Franchise Business.
Management Recruiters must approve the location of your office and any relocation. Approval will only be denied where the location is in the legacy territory of an existing member with an exclusive territory. The office location is subject to Management Recruiters' reasonable approval, which will be based on the size of the office and the nature, location, and quality of the building in which you want to locate. You may relocate your office as you choose, subject to Management Recruiters' reasonable approval, which will be based on the same considerations.