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Express Employment Professionals is a staffing and recruiting company founded in 1983, headquartered in Oklahoma City. They have expanded their wings to many countries and now have more than 825 franchise locations in the U.S., Canada, South Africa, Australia, and New Zealand.
They act as a bridge between a company and people looking for jobs. They offer a full range of employment solutions, including evaluation hire, temporary staffing, professional search, and human resources for businesses around the globe.
Buying an Express Employment Professionals franchise seems like a profitable opportunity. Well, it is only lucrative and thriving on the surface, but the truth comes out when we dig deep into the company’s reports, ongoing projects, and reputation in the market.
The Express Employment Professionals company is trying to evolve, but the solutions have failed to do so. Today’s job seekers are on new channels, including LinkedIn, Google, Facebook, Twitter, and Pinterest. However, the obsolete recruiting software of yesterday is still where companies are making their decisions.
They often use an opaque and slow process, which can be frustrating for candidates and clients alike. Many franchisees require a months-long recruitment process involving extended interviews, presentations, and even a “trial day” that wastes the time of all involved parties.
While not every franchise deal will be perfect, businesses must do their research before entering into one. By communicating with unhappy franchisees, reviewing FDD, understanding industry trends and competitors, Fransmart has possibly identified the potential red flags for the Express Employment Professionals franchise.
4 Reasons Why You Should Not Buy The Express Employment Professional Franchise:
Express Employment Professionals is one of the notable staffing companies. There are still more cons to its franchise opportunity. So, let’s go through the shortcomings and decide if it is beneficial to buy the franchise or not.
#1 Initial Franchise Investment Cost is too heavy As Compared to Profits
Setting up a new franchise is always a substantial financial commitment. Many new franchisees face vital challenges in raising capital, getting profit, paying taxes, and administrative tasks.
The initial investment for setting up the Express Employment Professionals franchise is as follows:
- Initial investments: $135,000 – $206,000
- Net-worth Requirement: $250,000
- Liquid Cash Requirement: $50,000
ONGOING FEES
- Initial Franchise Fee: $35,000
- Ongoing Royalty Fee: 8.6%
- Ad Royalty Fee 0.6%
Express Employment Professionals’ initial franchise fee is up to $35,000, and the total initial investment range from $135,000 to $206,000. The entire term of the franchise agreement is for five years, and the renewal term will also be for five years if all of their conditions are met. The cost of setting up the Express Employment Professional franchise is very high in comparison to the return on investment. In the starting months, the revenue is not good, and the expenses are high. When you start generating enough income, you have to pay the royalty fees and renewal fees again, making it hard to make too much profit if your franchise didn’t perform exceptionally.
#2 Lawsuit Charges Against Express Employment Professionals is Bad for its Reputation
Express Employment Professionals is facing many legal accusations and allegations. An unpaid wage class-action lawsuit against Express Employment Professionals alleged that the defendants failed to pay overtime wages correctly. The plaintiffs also accused Express Services of violating the California Unfair Business Practices Act and Private Attorneys General Act of 2004. Such legal accusations are very demeaning and lose the trust of the people in the company.
#3 Staffing Companies Have to Face Pandemic Effects
In the pandemic, no businesses were growing, and many were even shutting down, leading to layoffs and no job vacancies. Because of the lockdown, staffing employment plummeted by 33.6%, with more than one million jobs in the second quarter of 2020. It affected the profits of staffing companies on a big scale. Staffing companies are now working in their full power and gradually picking up the pace as everything opens again. Setting up a new franchise will be more strenuous as all the already existing companies are having a hard time and facing a crunch in profits.
#4 Training Session— A Tiring Process
Express Employment Professionals claims to provide the most extensive training in the franchise industry. It trains franchises in every business category required to assist them in becoming advanced and thriving franchise owners. But this training session at the same time is also time exhaustive. Training session lengthens the starting up of the new location, which also discourages the franchise owner.
To become the Express Employment Professionals franchisee is a hefty financial commitment, but at the same time, you also enjoy the benefits that include:
- You get immediate acceptance and trust from your clients when you are a franchise of Express Employment Professionals.
- You are associated with a well-built and renowned world corporate leader.
- Express Employment Professionals has over 38 years of industry recognition and success.
- You get an already working performance-driven model.
Conclusion
Express Employment Professionals is a well-known name in the staffing company. Buying their franchise might look like a step towards success, but it’s not true. After looking at the setting up cost and return on investment of the Express Employment Professionals franchise, we can say that it will not be profitable in the starting few years. The allegations against Express Employment Professionals have deteriorated its reputation and raised trust issues among the clients. Businesses are still recovering from the toll that the pandemic has caused on them, and setting up a new business at such a time is a risky decision.
Buying a franchise requires a lot of investment and time, so think deeply and ponder all the above information before deciding.
Sources:
https://www.linkedin.com/pulse/why-most-recruiting-industry-deep-sh-never-coming-out-sheehy-
https://www.franchisedirect.com/directory/expressemploymentprofessionals/ufoc/28/
https://www.ecityworks.com/express-employment-franchise-cost