MRI Network Franchise Misrepresentation / Fraud

Read how Management Recruiters International misrepresented the truth for years about who was, and who was not, a real MRI Network franchisee.

Knowing who is in the franchise network is information provided repeatedly by the franchisor as they actively encourage franchisees to work together. Read how they misrepresented for years someone as a regular franchisee who had no current franchise agreement, who had not been paying royalties for years and who was in massive, growing and uncontrolled debt. See how they actively encourage real franchisee towards this known danger.

When I joined the franchised network, I was trained in benefits of inter working with the rest of the franchisees in the network. It made sense and was part of the reason I purchased the franchise. The concept was, we all work to the same high standards, we all are trained to the same level, we all are governed by the Franchisor in terms of reporting, paying royalties and sharing work (IOR).

MRI Network consists of a global set of recruitment franchisees all working to the same methodology and systems as trained by Management Recruiters International Corporate. The franchised network is a powerful aspect of the group. Single offices are able to work in isolation and do so. However, one of the main selling points of joining such a franchise network is the ability to immediately work with other franchised offices around the globe and share candidates, job orders and resulting cash from successful placements. This process is called Inter Office Referral or IOR.

When CDI Corporation purchased The Humana International Group (HIG) in April 1999, they integrated it into their Management Recruiters International group thus creating an international arm to their USA recruitment business. In this acquisition by CDI Corporation, they inherited a franchisee who I will refer to as Mr JW. Mr JW had not been paying his royalties to the previous franchisor and had amassed large debts.

Lack of Management Action by MRI Network

At acquisition (April 1999) Mr JW owed £31,785 UK Pounds (approximately $59,027.62 USD) to the MRI Network and their owners, CDI Corporation, in unpaid royalties. That was a pretty dire situation for any good franchisor to inherit.

So what did MRI Network do about it? Did they sling him out of the network for breach of contract? No.

Did they allow him to stay in the franchise network but prevent him from inter working with other offices to protect them from his track record of non payment? No.

Well, they did not address this problem. In fact they allowed Mr JW's unpaid royalty debt to grow year on year. Over the following years (1999 - 2003) they allowed this debt to grow to an astonishing amount of £170,477:60 UK Pounds (approximately $316,626 USD).

Misrepresentation / Fraud by MRI Network Franchise

During all of this time, April 1999 to early 2003, CDI Corporation and MRINetwork management chose to continued with their franchise misrepresentation and deception of Mr JW to the whole of the franchised network and to clients alike. We (MRI Network franchisees) were repeatedly encouraged to inter-work and share work and money with (IOR) this bogus franchisee. That in my opinion is both fraud and unethical behaviour of a franchisor.

This misrepresentation by MRINetwork and CDI Corporation was not a one-off error. It was repeated again and again over years. Mr JW was listed on MRI Network web site. He was invited to all franchise meetings as a regular franchisee. He appeared in the lists of franchisees issues by MRINetwork management. This deception that Mr JW was simply another regular Management Recruiters International Franchisee was held consistently over years by MRI Network franchise management to the outside world. It fooled all real franchisees and clients alike.

That in my opinion is misrepresentation and possibly fraud by MRI Network and their owner CDI Corporation. In my opinion it also demonstrates a justifiable reason that any current MRINetwork franchisees could cite to terminate their franchise agreements.

In addition to the misrepresentation and fraud detailed above, there are a number of other ethical franchise issues that I have raised in my correspondence to Roger H Ballou of CDI Corporation about Management Recruiters International.

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