Are there any geographic restrictions placed on Management Recruiters franchisees for soliciting and conducting business?
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.
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.
Source: Item 12 — TERRITORY (FDD pages 40–43)
What This Means (2024 FDD)
According to Management Recruiters's 2024 Franchise Disclosure Document, franchisees face no restrictions on soliciting or conducting business anywhere in the world. However, the franchise is a single site non-exclusive location, meaning Management Recruiters can sell additional franchises within the franchisee's geographic location. Management Recruiters is not obligated to compensate franchisees for business conducted within their location using their trademarks.
Management Recruiters does not grant exclusive territories, so franchisees may face competition from other franchisees, company-owned outlets, other distribution channels, or competitive brands controlled by Management Recruiters or its affiliates. Some existing franchisees have "legacy territories," and these franchisees are not obligated to allow another franchisee to relocate into their territory. If a new franchisee chooses to locate or relocate to a legacy territory, they may be required to pay a supplemental royalty to the existing franchisee to obtain their consent, typically two percent (2%) of Net Cash-In, depending on the legacy territory owner's decision.
Management Recruiters and its affiliates can use any distribution channels, including the internet, to make sales in any territory while using the Management Recruiters trademarks, without compensating franchisees. Franchisees must obtain Management Recruiters's prior written approval to relocate their office, and the new location is subject to Management Recruiters's approval based on the office size, nature, location, and quality of the building.
Furthermore, Management Recruiters owns other brands such as SearchPath, Snelling, HireQuest, HireQuest Direct, TradeCorp, DriverQuest, and HireQuest Health, and franchisees from these brands could operate in the same area as a Management Recruiters franchisee. HQ MRI Corporation will attempt to resolve any conflict between franchisees of these systems in a mutually beneficial manner through informal mediation, fee splitting, referral agreements, and/or Franchisor's enforcement of certain codes of conduct or other operating standards as necessary.