Under what circumstances will Management Recruiters deduct collection costs from amounts owed to a franchisee?

According to Management Recruiters' 2024 Franchise Disclosure Document, Management Recruiters may deduct collection costs from amounts owed to a franchisee if they incur costs to collect money due for services provided to the franchisee's clients. While franchisees are typically responsible for collections, credit, and related expenses, Management Recruiters will deduct these costs from any amounts owed to the franchisee on the next weekly Franchisee Share calculation immediately following their incurring these costs.

This means that if a Management Recruiters franchisee's client does not pay for services rendered, and Management Recruiters has to take steps to collect the outstanding amount, the franchisee will ultimately bear the cost of those collection efforts. These costs will be deducted directly from the franchisee's share of revenue in the subsequent weekly payment.

Prospective franchisees should be aware of this policy as it can impact their profitability. It highlights the importance of careful client selection and effective credit management to minimize the risk of incurring collection costs. Franchisees may want to inquire about Management Recruiters' typical collection costs and strategies to mitigate potential deductions.