About the author

Bob Stewart BSc. Hons, CEng MIET, the author, graduated from Essex University with an honours degree in Electronic Engineering in 1976. He is a Chartered Engineer. He worked for more than 20 years in a research and development (R&D) environment where he rose through the management ranks. In his last years in corporate life, he was a line manager responsible for teams of managers and professional engineers in several locations (UK, Ireland and USA). During his career in R&D he worked on next-generation transatlantic telephone systems, Mondex (early chip and pin technology), development of the next-generation telephone exchanges, development and deployment of global network management systems, and development of new telephony equipment with both UK and Far Eastern OEM suppliers. He met and married his wife whilst at university. They have 3 children (now adults). Prior to the collapse of his business through losses incurred by working with Mr JW, (the person that MRINetwork chose to falsely represent as a regular bone-fide franchisee), he was a Rotarian for a number of years and President of his local Rotary Club.

Involvement with Management Recruiters International, MRI Network and CDI Corporation

In 1996 I purchased a franchise from the Humana International Group (HIG), an executive headhunting recruitment franchise. One of the people who started HIG in the UK was Doug Bugie. Doug Bugie started the HIG with intimate knowledge of the Management Recruiters International (MRI) system as he used to work for them in the USA. The model he used was based on their model. Doug Bugie sold a number of recruitment franchises both in the UK and in other parts of the world excluding the USA. In April 1999 Doug Bugie sold the Humana International Group to CDI Corporation, the owners of MRI Inc. Management Recruiters International (MRINetwork) renamed HIG to Management Recruiters International WorldWide (MRIWW). This take-over of HIG was a reasonably natural 'marriage' as the recruitment franchise systems were intrinsically identical. The win for CDI Corporation (the owners of MRI Inc) and for Management Recruiters International (MRI) was that it gave an international dimension to their otherwise USA based recruitment franchise operation. It broadened the network as a whole for all recruitment franchisees.

Inter Office Referral (IOR)

One of the key selling propositions made by Management Recruiters International (previously HIG and now MRINetwork / MRI Network) to prospective franchisees is that anyone buying a recruitment franchise is not just a single office i.e. the classic one-man-band. This is so, as this franchised recruitment network MRI Network is an international group of like minded franchised recruiters / people / offices, all using the same methodology and standards to recruit and is controlled by one single recruitment franchisor. This gives the opportunity for any recruitment franchisee, to sell the 'recruitment network' to clients by claiming that the network 'works as one' with the ability to form virtual teams from around the globe, of offices all working together. All of these offices are recruitment franchisees all trained and reporting contractually to the single recruitment franchisor, Management Recruiters International. This is a good 'sell', and in my opinion, is one of the main reasons that most people buy into the recruitment franchise. This inter working with other offices is given a name by Management Recruiters International or MRI Network. It is called 'Inter Office Referral' (or IOR for short). The Inter Office Referral (IOR) applies both to search assignments and to candidates. An example of how this works is quite simple. Franchise office 'A' agrees to supply candidates for a job order (JO) to their client. If they fulfil the JO with a suitable candidate they receive all the money for that placement. However, if this is difficult to fill, or the client is in a rush, or it is multiple vacancies to be filled etc., the franchise office would often offer to share the JO to other offices within the MRINetwork. The advantage of this is that the probability of success is much greater as well as speed of fulfillment. From the client's perspective this is all happening behind the scenes and does not impact upon them at all, except from the benefits mentioned above. Behind the scenes, in order to make this work, the recruitment franchise office has contacted other offices within the Management Recruiters International and agreed to IOR the work. The IOR again is really quite simple. In essence the originating office agrees to split the fee from the client with the other MRINetwork office if their candidate is placed. Typically these fee splits are 50:50, but can vary by mutual agreement much wider than this. If the candidate is found by the other office then a split fee follows. After the candidate is placed, the original office collects the fee from the client and gives the appropriate share of that fee to the other recruitment office that participated in the IOR. MRI Network train people in this process as part of their basic training. They frequently encourage offices to participate in this approach and as stated above. In my opinion this ability to share work and/or candidates is a key selling feature of why people buy into the MRINetwork Franchise.

Inter Office Referral Problem - IOR Problems

My problems started when I worked with, and started to share work with, what I was led to believe was another MRINetwork / MRI Network / Management Recruiters International network franchised office. I found out to my cost that this person was no such thing. He was originally a franchisee, but when CDI Corporation acquired HIG, he was already in arrears in Royalty payments by £31,785 UK Pounds (approximately $59,000 USD). You might think that this was bad - but just a few months later, his franchise agreement expired and was not renewed. Management Recruiters International, then allowed these debts to grow, year-on-year, to an astonishing amount of more than £170,000 (approximately $316,000 USD). What makes this point even more alarming is that during all of this period, from acquisition in April 1999 to early 2003, CDI Corporation and MRINetwork management misrepresented this person to the whole of the MRI Network as a regular bone-fide franchisee and repeatedly encourages franchisees to inter work with him. In fact when I did so, Steve Mills actually congratulated me in winning the work and inter working with him.

Things initially went well for me as a new franchisee. I set up my franchised office and worked hard to find new clients and suitable candidates. I actively participated in the Interoffice Referral system (IOR) and the franchised network as a whole. I regularly attended franchise meetings and found value in them. It provided an opportunity to meet other recruitment franchisees, and exchange ideas and other issues.

MRI Network / Management Recruiters International Meetings

The franchisor, MRINetwork Corporate owned by CDI Corporation, did and still do hold regular meetings. These are on a national and International basis. For example, as an MRI Network franchisee, I have attended quite a few UK based meetings over the years. Additionally, MRINetwork / Management Recruiters International hold global meetings, normally annually and usually in the USA. For many years, the global meetings were held in Cleveland - I attended one of those too. All good stuff, as you get the chance to meet other owners (i.e. other MRINetwork franchisees) who you may well have spoken to by telephone or email but possibly not met. MRI Corporate (the franchisor owned by CDI Corporation ) have the opportunity to update MRINetwork franchisees on what is new and what is happening next. The topics discussed are fairly typical of any such franchised recruitment organisation. One of the topics that MRI Corporate very often raise at these events is the Inter Office Referral system (IOR). No surprises really as it should be a good system that offers every office the opportunity to do more work by sharing with other MRI Network franchised offices. It is also not surprise that MRINetwork Corporate are keen to train and promote this as their regular income (Royalty fees) comes from successful placements over and beyond the original recruitment franchise purchase fee.

Read more about Management Recruiters International franchise problems in:

Read the facts of what they did and form your own opinion on CDI Corporation, MRI Network and their franchise ethics.