Under what circumstances will the full-face amount of Contract Staffing Receivables be deducted from a Management Recruiters franchisee's Gross Margin?

• 5.3. Contract Staffing Continuing Fees, Uncollectibles, Collection Expenses, Marketing and Public Relations, Security Deposit. Following the end of each Accounting Period, Franchisee's Contract Staffing Share shall be calculated by deducting from Gross Margin the following amounts:
  • the Contract Staffing Continuing Fees;
  • to the extent that Contract Staffing Receivables remain uncollected beyond fortytwo (42) days after the invoice date ("Forty-Two Day Period"), a delinquency fee of one-half of one percent (½%) of the amount of such uncollected Contract Staffing Receivables for each fourteen (14) day period following said Forty-Two Day Period;
  • the full-face amount of Contract Staffing Receivables that are either (i) declared uncollectible (and, thus, written off) during the Accounting Period or (ii) which remain uncollected beyond eighty-four (84) days after the invoice date;
  • Franchisee's pro-rata share of all legal and other out-of-pocket collection expenses incurred by Franchisor related to Franchise Receivables;
  • at Franchisor's discretion, any other amounts owed by Franchisee to Franchisor or any of its Affiliates, provided such amounts are disclosed to Franchisee;
  • the Marketing and Public Relations Fee;
  • the Back Office Services Fee; and
  • 1% of Gross Funds until the entire Security Deposit is collected.

Source: Item 23 — RECEIPTS (FDD pages 67–327)