Management RecruitersFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Management Recruiters franchise requires a total initial investment of $44K – $96K, including a $40K franchise fee and an ongoing 9.0% royalty[2]. Per the 2023 FDD, average unit revenue was $29K[2]. SBA 7(a) loans show a 11.3% charge-off rate across 72 loans[1]. Verdict grade: F. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2023 FDD issuance
Overview
- Investment
- $44K – $96K
- 9th pct Business Serv…
- Avg gross sales
- $29K
- 1st pct Business Serv…
- Royalty
- 9.0%
- 27th pct Business Serv…
- Units
- 203
- 48th pct Business Serv…
- SBA default
- 11.3%
- system-wide median varies by category
Quick verdict · Business Services · color = vs category peers
Green = >15% above Business Services avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
At 0.4x revenue per dollar invested, this system underperforms the typical 1.5-2.5x range.
Franchising since 1965. Systems this mature have refined operations and brand recognition.
Franchised units fell from 265 to 203 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $44K – $96K including a $40K franchise fee, 9.0% ongoing royalty.
- Average unit revenue of $29K/year (median $24K).
- Verdict F (Bottom Quintile) with a risk score of 100/100. SBA loan charge-off rate of 11.3% across 72 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- HQ MRI Corporation
- Parent company
- HireQuest, Inc.
- Incorporated in
- DE
- HQ
- 111 Springhall Drive, Goose Creek, SC 29445
- Auditor
- Plante & Moran, PLLC
- Audited financials
- Franchisor revenue
- $22.5M
- vs $31.0M prior year
Affiliated brands
- Michelin North America
Other brands the franchisor or its parent operates (Item 1).
Overview
About
Management Recruiters franchisees operate staffing and recruitment placement services, primarily focused on identifying and placing mid-to-senior level management candidates with corporate clients. Day-to-day activities include candidate sourcing and screening, client relationship management, job matching, and negotiating placement fees typically earned on successful placements.
- CEO
- Richard F. Hermanns
- Headquarters
- SC
- FDD year
- 2023
- States available
- 42
FDD Item 7 · 2023 filing · 18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $40K | $40K | |
| Real Estate and Improvements | $0 | $2K | |
| Computer Hardware | $0 | $5K | |
| Applicant Tracking System | $900 | $2K | |
| Online Recruiting Software | $1K | $6K | |
| Cabling for Office | $0 | $2K | |
| Internet | $0 | $300 | |
| Office Furniture | $0 | $3K | |
| Licensing Fees | $0 | $300 | |
| Initial Office Supplies | $300 | $500 | |
| Business Insurance | $2K | $2K | |
| Professional Services | $0 | $3K | |
| Miscellaneous | $0 | $500 | |
| Salaries: Researcher | $0 | $6K | |
| Salaries: Account Executive | $0 | $9K | |
| Salaries: Project Coordinator | $0 | $9K | |
| Printer (all in one) | $0 | $150 | |
| Additional Funds (3 months) | $0 | $6K | |
| Total initial investment | $44K | $96K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$4K
13.5% margin
Unlevered ROIC
5%
EBITDA / total invested capital
Payback
18.7 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $44K – $96K
- Better than avg vs category
- Liquid capital req'd
- $0 – $6K
- Better than avg vs category
- Franchise fee
- $40K – $40K
- Better than avg vs category
- Royalty
- 9.0%
- percentage · typical 6–8%
- Ad fund
- 0.5%
- typical 3–5%
- Total fee load
- 9.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 9.0% of gross sales |
| Marketing / ad fund | 0.5% of gross sales |
| Transfer fee | $5K |
| Renewal fee | $0 |
| Inventory (initial) | $85K – $500K |
| Total fee load | 9.5% of rev |
Financial Performance
- Avg gross sales
- $29K
- Per unit, per year
- Median gross sales
- $24K
- Item 19 type
- Executive Search Placement and Contract Staffing Information
- Sample size
- 197 units
- vs category median 32 · large
- Range (low → high)
- $196→$189K
- Cohort dispersion (min → max)
- Transparency tier
- none
- Categorical assessment of disclosure depth
- Transparency
- 4 / 5
- vs category median 3 / 5 · above
Compared against 360 Business Services brands
Revenue is only 0.4x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
vs Business Services averages
How Management Recruiters Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 203
- Opened
- 6
- Last reporting year
- Closed
- 49
- Terminated
- 3
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 11
- Term expired, not renewed (per Item 20)
- Turnover rate
- 24.1%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (yr3)
- -17.5%
- Net unit change last year
- 3-yr CAGR
- -23.4%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 2
- Transfer rate
- 1.0%
- Owners selling to other franchisees
- Termination rate
- 6.9%
- Franchisor-initiated terminations
- Ceased ops
- 23.1%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 41 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
A system losing more than 10% of its units year-over-year is a red flag. Check whether closures are concentrated in specific regions.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 72
- Loan volume
- $14.2M
- Median loan
- $80K
- 50th percentile
- Charge-off rate
- 11.3%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 88.7%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 38
- Defaults
- 8
Vintage analysis
Management Recruiters charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Management Recruiters's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 24-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Contracting franchise system with alarming unit decline, undisclosed profitability, extremely low average revenues, unprotected territory, and prior franchisor litigation involving fund mismanagement present high-risk investment profile unsuitable for most investors.
Litigation (Item 3)
Predecessor franchisor Management Recruiters International, Inc. was party to two concluded legal actions against franchisees. First action against Management Recruiters of Tampa-North, Inc., Gary A. King, and Kelly King (Docket No. V 1627-T-33JSS, filed July 15, 2020) for breach of contract, breach of promissory note, covenant not to compete violation, trademark infringement, and tortious interference. Case stayed due to Gary A. King's Chapter 7 bankruptcy petition (filed July 30, 2020). Gary A. King's debts discharged March 4, 2021. Remaining defendants settled May 3, 2021 for $6,500 and case dismissed May 6, 2021. Second action against Peter Rouillard et al. (Docket No. CV 17 885383, filed December 26, 2017) for breach of contract. Rouillard filed counterclaim October 22, 2018 alleging breach of contract, constructive termination, unjust enrichment, fraudulent inducement, and defamation seeking over $25,000 per count.
Largest disclosed settlement: $6,500
Bankruptcy (Item 4)
Disclosed in last 7 years
Gary A. King filed voluntary petition for relief under Chapter 7 of US Bankruptcy Code on July 30, 2020 in connection with franchise litigation. Automatic stay imposed per 11 USC §362(a). Debts discharged and matter closed March 4, 2021.
Audited financials (Item 21)
Yes · Plante & Moran, PLLC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 100 / 100 rating
- 01MEDUnit count declined 17.5% YoY (203 units) indicating system contraction and franchisee viability concerns
- 02MINORAverage revenue of $28,940.86 is extremely low for a staffing/recruitment franchise and suggests most units are underperforming
- 03MINORNo Item 19 (Net Income) disclosure prevents accurate ROI assessment and raises transparency concerns
- 04HIGHPredecessor franchisor litigation history includes $300,000 settlement for encroachment and fund mismanagement—material governance red flag
- 05MINORNo territory protection creates direct competition risk and race-to-bottom pricing dynamics among franchisees
- 06HIGHGoing Concern status of 'False' suggests franchisor financial instability or restructuring concerns
- 07MEDRoyalty structure on disclosed average revenue ($28,940) yields only $2,604 in annual royalties—unit economics appear unsustainable
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Territory type | non_exclusive |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | South Carolina |
| Litigation count | 3 |
View Item 3 litigation summary
Predecessor franchisor Management Recruiters International, Inc. was party to two concluded legal actions against franchisees. First action against Management Recruiters of Tampa-North, Inc., Gary A. King, and Kelly King (Docket No. V 1627-T-33JSS, filed July 15, 2020) for breach of contract, breach of promissory note, covenant not to compete violation, trademark infringement, and tortious interference. Case stayed due to Gary A. King's Chapter 7 bankruptcy petition (filed July 30, 2020). Gary A. King's debts discharged March 4, 2021. Remaining defendants settled May 3, 2021 for $6,500 and case dismissed May 6, 2021. Second action against Peter Rouillard et al. (Docket No. CV 17 885383, filed December 26, 2017) for breach of contract. Rouillard filed counterclaim October 22, 2018 alleging breach of contract, constructive termination, unjust enrichment, fraudulent inducement, and defamation seeking over $25,000 per count.
Items 10, 11
Training & Operations
- Classroom training
- 82 hrs
- On-the-job training
- 0 hrs
- Ongoing training
- Required
- Time to open
- 2 mo
- From signing to launch
- Franchisor financing
- Offered
- Item 10
- POS system
- Applicant Tracking System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Applicant Tracking System
Item 20 · call current owners
Franchisee Contacts
187 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Management Recruiters · FDD (2023) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Management Recruiters franchise?
The total investment to open a Management Recruiters franchise ranges from $44K – $96K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Management Recruiters franchise owners earn?
According to Item 19 of the Management Recruiters FDD, the average gross sales per unit is $29K. The median is $24K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Management Recruiters's franchise failure rate?
Based on SBA 7(a) loan data, Management Recruiters has a charge-off rate of 11.3% across 72 loans, meaning 11.3% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Management Recruiters franchise locations are there?
As of their most recent FDD filing, Management Recruiters has 203 total units in the United States, including 265 franchised units and 0 company-owned units. 6 new units were opened in the latest reporting year.
Is Management Recruiters a good franchise to buy?
FranchiseVerdict rates Management Recruiters as a F-grade franchise with a risk score of 100 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.