Management Recruiters International Franchise Problems

My early years as a franchisee in the MRI Network, prior to CDI Corporation acquiring it, were a good experience.

My problems started when I, as a genuine franchisee of Management Recruiters International, began to work with another MRINetwork office. When I say 'another MRI Network office', let me qualify that. I believed that I was working with another MRI Network office. Why, because, the management of MRINetwork, portrayed him as that. For example, he was repeatedly listed as regular franchise office with all his contact details in the MRI Network directory. This was produced and regularly updated by the Franchisor. He, along with all franchise office owners was invited to attended, and did attend some of the Management Recruiters International national meetings as a 'regular' franchisee. MRI Network Corporate office (the franchisor) portrayed him to all of the franchise Network as a regular franchisee. All other franchisees and clients too were deceived into believing that he was just another regular franchisee.

Management Recruiters International Misrepresentation.

That in my opinion is a clear case of misrepresentation and fraud. Read more about this in Misrepresentation and/or Fraud. In fact I believe that there was absolutely no way of knowing that this misrepresentation by Management Recruiters International was false. Unless you were Steve Mills from the MRINetwork Corporate Office. Or his management (USA based leading ultimately to Roger H Ballou) or one of his Corporate Office staff. This deception by MRI Network Corporate was, as I found out to my cost, the tip of the iceberg on the magnitude of the problem.

Management Recruiters International - Problems for years.

The problem existed for years and became worse, year on year. For example:

In April 1999, CDI Corporation purchased the Humana International Group. They integrated it into their USA based MRI operations. They renamed it all to what is now known as Management Recruiters International. At the time of this acquisition there was a real franchisee in the network that they purchased who I shall refer to as Mr JW. Mr JW purchase his franchise agreement on 31st October 1994 for a duration of 5 years. However, at this time of take-over by CDI Corporation Inc. and MRI Network management, Mr JW owed £31,785 UK Pounds (approximately $59,027.62 USD) to the them in unpaid royalties to the original franchisor. That was a pretty dire situation for any good franchisor to inherit.

Management Recruiters International - failure to manage:

So what did franchise management do about this known problem of Mr JW?

  • Did they sling him out of the franchise network for breach of contract? No.
  • Did they allow him to stay in the MRINetwork but prevent him from inter working with other offices. To protect genuine franchisees from his track record of non payment? No.
  • Did they continue to falsely represent Mr JW as a regular franchisee to all other real MRI Network franchisees? Yes
  • Did they continue to falsely represent Mr JW to all clients and potential clients as a regular Management Recruiters International franchisee? Yes.

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).

Additionally, several months after CDI Corporation's acquisition in April 1999, Mr JW's franchise agreement expired. Specifically, on 1st November 1999. You may think that this would have been an obvious termination point, accepting CDI Corporation's and MRINetwork's failure to act sooner. But no - they simply carried on as before. That is, they continued to conceal the growing problems with Mr JW and continued to repeatedly represent him to the rest of the MRINetwork as simply another regular Management Recruiters International franchisee. Only CDI Corporation and MRINetwork management knew the dire truth about Mr JW, his growing debts and his expired franchise agreement.

Management Recruiters International - Duty of Care Failure to Franchisees

In my opinion, this constitutes a total failure by CDI Corporation and MRI Network to act responsibly as a franchisor. In my opinion, it also shows a complete lack of 'duty of care' towards the other real franchisees in the network who were put at risk through what I believe was deliberate misrepresentation by CDI Corporation and MRINetwork. I say deliberate, since this was clearly not an oversight. I am now in possession of internal documents that show that both MRI Inc (the USA arm) and CDI were aware of the Mr JW's debts from shortly after their acquisition in 1999. You can view extracts confirming CDI Corporation and Management Recruiters International's knowledge of this situation dating back to 2000 in other areas in this web site.

Who would buy a Management Recruiters International Franchise?

I believe that CDI Corporation and Management Recruiters International management have seriously damaged the MRINetwork. By that I mean that their actions or inactions have brought the whole network in to discredit.

Who would buy a franchise from an organisation if they knew that their practice was to:

Deliberately misrepresent to its franchisee who is a bone-fide franchisee and who is not?

Deliberately withhold vital information from its franchisees, and actually congratulates them for inter-working with Mr JW in the false believe(created by the franchisor) that he was a regular bone-fide Management Recruiters International franchisee?

Allow 'franchisees' to grow astonishing debts of £170,477:60 UK Pounds (approximately $316,626 USD) by not paying royalties.

Allow people to continue in Management Recruiters International franchise network, masquerading as regular franchisees after their franchise agreements have expired years earlier?

Encourage all Management Recruiters International franchisees to inter work (IOR) but who also allows and represents high risk financially unsound people in its network masquerading as regular franchisees?

This disastrous situation was, in my opinion, totally avoidable and totally self inflicted by the management team of CDI Corporation and MRINetwork. They knew this situation existed, they allowed it to continue for years whilst it got rapidly worse year-on-year. They concealed it from their royalty paying franchisees and thereby put all the genuine franchisees at risk from operating as trained and encouraged by the franchisor - i.e. to inter work and IOR across the franchised network with other franchisees.

I believe that their actions and inactions represents fraudulent misrepresentation and breach of contract not just of my franchise agreement but to all franchisee's who share the same or similar clauses in their franchise agreements. If I am correct on this point, I believe that all franchisees could justifiably use this breach of contract to terminate their franchise agreements and walk away from MRINetwork. See Management Recruiters International - Breach of Contract.

I also believe that Roger H Ballou as head of the Corporate tree, has a lot to explain. CDI Corporation knew about these issues as far back as 2000 to my certain knowledge. Whilst Roger H Ballou did not head CDI Corporation until 2001, he certainly knew about these issues some time before he eventually decided to publicly declare that Mr JW was no longer part of the MRINetwork. See Roger H Ballou Response

What is also an ongoing problem is that Roger H Ballou, will not address these ongoing issues and concerns. I have written to him on numerous occasions asking for his response to many of these issues. He repeatedly sidesteps them and/or refuses to answer. The problem he perpetuates by this 'head in the sand' approach is that he does not address the fundamental problems. If he did so and recognised and acknowledged that his company did not act appropriately, then perhaps some remedial action could be taken. But by continually ducking the issue, it leaves it open and ongoing. This is a seriously flawed approach in my opinion. By not acknowledging an error has been made, one is left with the impression that Roger H Ballou is comfortable that it was all OK. It follows that if he believes this, then he is comfortable with it happening again. Perhaps the same disastrous scenario exists right now in the Management Recruiters International franchise - who knows?

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