Nextaff Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$1 - $158,886
Franchise Fee
$1
Total US Locations
31
Business Summary
NEXTAFF offers franchises that provide staffing services, including recruiting, screening, and hiring quality talent for clients. NEXTAFF franchisees connect businesses with temporary, temp-to-hire, and direct hire field employees. NEXTAFF handles the payroll services and support functions for these field employees.
Corporate History
NEXTAFF was originally formed as Nextaff, LLC in Kansas on July 26, 2002. In August 2016, Malone Nextaff, LLC acquired the assets of Nextaff, LLC, including all franchise contracts. Malone Nextaff, LLC later changed its name to Nextaff Group, LLC in November 2019 and domesticated as a Kansas limited liability company in December 2021. NEXTAFF began offering franchises in February 2004.
Financial Overview
Investment Range
$1 - $158,886
Franchise Fee (Low)
$1
Franchise Fee (High)
$49,000
Royalty %
9%
Marketing %
1%
Equipment Costs (Low)
$10,934
Equipment Costs (High)
$27,923
Working Capital
$55,688
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
NEXTAFF's financial statements for 2023 show a positive net income of $1,600,704 and positive cash flows from operating activities of $2,023,393. Current assets significantly exceed current liabilities. A notable financial point is that NEXTAFF claimed a refundable Employee Retention Credit (ERC) of $2,190,227 for 2023, which is recorded as a receivable. The IRS may audit this claim, and if NEXTAFF is deemed ineligible, it could be required to refund the amount, plus penalties and interest. Management believes NEXTAFF met the eligibility requirements for this credit.
Financing Details
NEXTAFF offers financing for a portion of the initial franchise fee for new qualifying franchisees and existing franchisees purchasing additional locations. For a single location, up to 75% of the initial franchise fee can be financed for 12 months at a Prime rate plus 2% interest. For two locations, the term is 24 months, and for three locations, it's 36 months. As collateral, termination of the Franchise Agreement may occur upon default. Additionally, NEXTAFF 'finances' the franchisee's payroll by employing Field Employees and paying their wages on the franchisee's behalf. NEXTAFF then collects payments directly from clients, reimburses itself for payroll and other fees, and remits the balance to the franchisee.
Performance Metrics
Total US Locations
31
Franchised Units
28
Corporate Units
3
Avg Square Footage
1,150
Franchising Since
2004
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
NEXTAFF has no litigation to report. The FDD explicitly states that no litigation is required to be disclosed in Item 3.
Bankruptcy History
NEXTAFF has no bankruptcy history to report. Item 4 of the FDD states that no bankruptcy information is required to be disclosed.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew the franchise, NEXTAFF franchisees must provide written notice at least 180 days before their agreement expires, be in good standing with no defaults, and update their premises to meet current brand standards. Franchisees must also sign a new franchise agreement and any ancillary agreements, and, if permitted by law, a general release. The new agreement may include different terms, such as reduced territory rights, increased Minimum Performance Standards, and higher advertising contributions. NEXTAFF may require franchisees to cure any deficiencies before renewal.
Training & Support Program
Franchisor Assistance
NEXTAFF provides comprehensive support to its franchisees, starting with site approval for new Traditional Franchises and providing specifications for signage and decor. For Traditional Franchises, NEXTAFF offers four days of on-site supervisory guidance for sales, recruiting, and operations. Virtual Franchises receive access to project management software. All franchisees receive initial training covering operations, services, client service, marketing, sales, employee scheduling, and recruitment. During operation, NEXTAFF assists with administrative, bookkeeping, accounting, marketing, sales, and general operating procedures. It also manages the payroll services program for field employees, including processing wages, taxes, and insurance, and assists with billing and collecting accounts receivable. NEXTAFF may advise on operating problems and requires attendance at an annual event training meeting.
Initial Training Hours
130
Training Location
Overland Park, KS
Ongoing Support
After opening, NEXTAFF provides ongoing support including operating assistance in administrative, bookkeeping, accounting, marketing, sales, and general operating procedures. Franchisees receive guidance through an Operations Manual, informal bulletins, and consultations via phone or at NEXTAFF's offices or the franchisee's location. NEXTAFF also manages the Payroll Services Program and may assist with billing and collecting accounts receivable. Franchisees (or their managing partners/managers) are required to attend supplemental and refresher training programs as designated by NEXTAFF, for which NEXTAFF may assess reasonable charges. Franchisees are also required to attend an annual event training meeting.
Franchise Requirements
Ideal Candidate Profile
NEXTAFF seeks franchisees who are focused on sales, possess strong management skills, and have proven sales abilities. For Traditional Franchises, the franchisee is expected to provide direct, day-to-day, full-time supervision, or ensure an approved manager does so, with the franchisee remaining active in overseeing operations. The franchisee or their dedicated sales development representative must prioritize sales to be successful. Additionally, Traditional Franchisees must hire a dedicated account manager/employee recruiter and a dedicated sales development representative, in addition to themselves, before opening. It is recommended that the franchisee or designated manager complete the Certified Staffing Professional program within the first year of operation.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Full-Time
Territory Type
Limited
Staff Count
3
Territory Size Requirements
For Traditional Commercial verticals, NEXTAFF territories are defined by geographic areas established by county and/or zip codes or other boundary limitations, which are detailed before signing the Franchise Agreement. For Virtual Healthcare and Technology verticals, franchisees do not receive an exclusive territory and have no territorial protection; instead, they receive client protection, which may entitle them to Strategic Account Commissions.
Staffing Notes
For a Traditional NEXTAFF Franchise, the franchisee must have two full-time employees, in addition to themselves, on staff from the first day of business. These required hires include a dedicated account manager/employee recruiter and a dedicated sales development representative, neither of whom can be the franchisee themselves. It is recommended that the franchisee or their designated manager complete the Certified Staffing Professional program issued through the American Staffing Association before the first-year anniversary of opening. The franchisee is solely responsible for hiring, compensation, and insurance for all internal staff.