What are the specific financial thresholds or operational failures that could lead to termination under Section 20.2 of the Management Recruiters Franchise Agreement and trigger the $15,000 fee?

you are responsible.

• 1. If your Franchise Agreement is terminated pursuant to Section 20.2 of the Franchise Agreement within nine (9) months of the date you sign the Agreement, you will be responsible for paying a fee of $15,000. Termination under Section 20.2 may occur in any of the following situations:
  • Franchisee has not generated sufficient Gross Funds to pay a Gross Continuing Fee of at least three thousand dollars ($3,000.00) within six (6) months following the Effective Date;
  • Franchisee is declared bankrupt or judicially determined to be insolvent, or all or a substantial part of the assets of Franchisee or the Franchise Business are assigned to or for the benefit of any creditor, or Franchisee admits his inability to pay Franchisee's debts as they come due;
  • Franchisee abandons the Franchise Business by failing to operate for five (5) consecutive days during which Franchisee is required to operate the Franchise Business under this Agreement's terms, or any shorter period after which it is not unreasonable under the facts and circumstances for Franchisor to conclude that Franchisee does not intend to continue to operate the Franchise Business;
  • Franchisee has made any material misrepresentation relating to acquisition of the Franchise Business or to induce Franchisor to enter into this Agreement;
  • Franchisee engages in conduct that, in Franchisor's sole determination, materially and unfavorably reflects upon the operation and reputation of the Franchise Business or the System;
  • Franchisee fails for a period of ten (10) days or such longer period as applicable Law may require, after notification of noncompliance, to comply with any federal, state, or local Law or regulation applicable to operation of the Franchise Business;
  • after curing any failure described in Section 20.1 Franchisee engages in the same noncompliance, regardless of whether such noncompliance is corrected after notice;
  • Franchisee repeatedly fails to comply with one or more requirements of this Agreement regardless of whether corrected after notice;

• the Franchise Business is seized, taken over or foreclosed by a Governmental Authority in the exercise of such official's duties, or seized, taken over, or foreclosed by a creditor, lien holder or lessor, provided that a final judgment against Franchisee remains unsatisfied for thirty (30) days, unless a supersedes or other appeal bond has been filed;

• a levy of execution is made upon the Franchise Business or upon any property used in the Franchise Business and is not discharged within five (5) days after such levy;

• Franchisee, or any of its Principals, shareholders, members, officers, directors, or partners is convicted of, or pleads guilty or no contest to, any crime punishable as a felony or involving moral turpitude or immoral conduct;

• Franchisee attempts to transfer the Franchise Business or make an assignment of this Agreement in violation of Section 13 of the Franchise Agreement;

• in the event of death or incapacity, the surviving spouse, heirs, beneficiaries, devisees, or legal representatives fail to comply with the provisions of Section 13.7;

• Franchisee discloses, attempts to disclose, or threatens to disclose any of the Trade Secrets in violation of this Agreement;

• Franchisee willfully and knowingly employs temporary employees in classifications of business which are specifically prohibited by Franchisor or otherwise does not adhere to the risk management policies of Franchisor;

• Franchisee fails to disclose to Franchisor the existence of a non-compete restriction applicable to Franchisee; or

• Franchisee or, if applicable, its Principals, shareholders, members, officers, directors, or partners, directly or indirectly, engage in or perform services for or hold an ownership interest in any business engaged in the temporary staffing of skilled and/or unskilled personnel (including, without limitation, clerical, computer, technical, accounting, and medical), employee leasing or related enterprise, other than Franchisor or its Affiliates or its franchisees.

Source: Item 6 — OTHER FEES (FDD pages 16–23)