HireQuest, Inc. (HQI): History, Ownership, Mission, How It Works & Makes Money

How does a staffing franchisor like HireQuest, Inc. (HQI) maintain profitability and a market cap over $122 million in a muted hiring landscape? You're looking at a company that generated $377.9 million in system-wide sales year-to-date through Q3 2025, primarily through a capital-light franchise model that focuses on royalty fees, not direct payroll risk. This unique approach, which recently included the acquisition and franchising of Northbound Executive Search, allows them to stay solidly profitable even as total revenue declined by 9.8% in the third quarter; it's a pure-play staffing model that merits a closer look.

HireQuest, Inc. (HQI) History

Given Company's Founding Timeline

You need to understand that HireQuest, Inc.'s history isn't a straight line; it's a merger of two staffing entities, both starting the same year. The core business traces its roots back to two separate companies established in 2002, which is defintely a unique origin story.

Year established

The operational history of the company's two key predecessor entities, Command Staffing, LLC and Hire Quest, LLC, both began in 2002.

Original location

The current principal executive office is in Goose Creek, South Carolina. However, the original Command Staffing, LLC was organized in Washington, while Hire Quest, LLC was formed in Florida.

Founding team members

The company's current structure is largely a result of the 2019 merger with Hire Quest Holdings, LLC, which was led by Richard Hermanns. Mr. Hermanns has served as CEO of the 'Legacy HQ' entity since its 2002 founding. His earlier partnership with Dan McAnnar in the 1990s laid the groundwork for the franchise model.

Initial capital/funding

While the initial capital for the 2002 entities isn't public, a significant capital event occurred in connection with the 2019 merger. This involved securing a $30 million line of credit with Truist Bank, which provided the financial muscle for the combined entity's growth strategy.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The real game-changer for HireQuest, Inc. was the 2019 merger. It wasn't just a name change; it was a strategic pivot to a pure-play franchisor model, which is a much lower-overhead, higher-margin business than the traditional company-owned staffing model.

This shift means the company focuses on collecting franchise royalties and service revenue, not managing all the day-to-day operational costs of every branch. You can see the impact of this model in the 2025 fiscal year data.

• The 2019 merger created a platform for aggressive, capital-light growth through acquisitions, like the 2021 addition of Snelling Staffing and LINK Staffing assets.
• The franchise model is designed to perform well in all economic cycles, as CEO Rick Hermanns noted. This is why, even with a 9.8% year-over-year revenue decline in Q3 2025 due to industry headwinds, the company achieved an impressive adjusted EBITDA margin of 55%.
• The financial flexibility is strong; as of June 30, 2025, HireQuest carried only $4.3 million of debt and maintained working capital of $28.6 million. That's a lot of dry powder for future deals.

The company's ability to generate a net income of $2.3 million in Q3 2025, a significant turnaround from a net loss in the prior-year quarter, shows the franchise-focused strategy is paying off right now. If you want a deeper dive into the numbers, check out Breaking Down HireQuest, Inc. (HQI) Financial Health: Key Insights for Investors.

HireQuest, Inc. (HQI) Ownership Structure

The control of HireQuest, Inc. is defintely concentrated, with company insiders holding the majority stake, which is a critical factor for any investor or analyst to understand when assessing corporate governance and long-term strategy. This structure means the leadership team has a powerful, direct influence over the company's trajectory, but it also limits the sway of institutional and public shareholders.

Given Company's Current Status

HireQuest, Inc. is a Publicly Held company, trading on the NASDAQ stock exchange under the ticker symbol HQI. This public status mandates financial transparency and adherence to U.S. Securities and Exchange Commission (SEC) regulations, giving you access to filings that detail its performance and ownership. As of November 5, 2025, the company's market capitalization stood at approximately $122M, with about 14.1M shares outstanding. The firm operates as a franchisor of staffing solutions, meaning its corporate revenue of $8.5 million for Q3 2025 is primarily driven by royalty fees from its extensive network of franchised offices.

Given Company's Ownership Breakdown

When you look at who actually owns HireQuest, the picture is clear: it's an insider-controlled company. Insiders-the officers, directors, and major shareholders-own a commanding share of the business. This high level of insider ownership, which is over 60%, suggests a strong alignment between management and shareholder interests, but also means major strategic decisions are less susceptible to outside pressure.

Here's the quick math: Insiders and institutions together control over 73% of the company. What this estimate hides is the influence of key institutional players like BlackRock, Inc. and Vanguard Group Inc., who, despite their smaller percentage compared to insiders, hold significant blocks of shares-over 2,085,077 shares in total for all institutions.

Given Company's Leadership

The company is steered by a seasoned management team, with an average tenure of 6.3 years, which is a good sign for operational consistency. The leadership's deep experience in the temporary staffing industry is central to the company's ability to remain profitable, even in a challenging labor market, as evidenced by the Q3 2025 net income of $2.3 million.

• Rick Hermanns: Chairman, President, and Chief Executive Officer. Mr. Hermanns has been in his current role since July 2019 and has nearly 30 years of experience in the staffing industry. He is the primary voice setting the strategic direction, which you can see reflected in the Mission Statement, Vision, & Core Values of HireQuest, Inc. (HQI).
• Charles David Ryan Hartley: Chief Financial Officer (CFO). Mr. Hartley is responsible for the financial discipline that helped the company achieve an estimated 2025 fiscal year EPS of $0.64 per share.
• Cory Smith: Chief Accounting Officer & Treasurer. He manages the accounting functions and joined the company during its merger with Command Center in 2019.
• John McAnnar: Chief Legal Officer and Vice President. He handles the complex legal affairs, including securities and employment law, which is crucial for a franchisor model.
• David Gerstner: Vice President of Operations. He brings almost 30 years of operational experience in the temporary staffing sector.

Finance: Track the next round of insider Form 4 filings by the end of the month to see if the ownership concentration changes.

HireQuest, Inc. (HQI) Mission and Values

When you look past the franchise model and the $23.9 million in royalty revenue reported for the nine months ended September 30, 2025, HireQuest, Inc. is defintely a mission-driven company. Its core purpose centers on community-level economic empowerment, not just filling a job order; they are focused on building a world where work actually works for everyone.

As a seasoned analyst, I see this cultural DNA-Integrity, Compassion, and Economic Development-as a key intangible asset, especially in a tight labor market where employee-employer value alignment is critical. This focus helps them maintain a strong network of more than 400 offices across 47 states, which is a huge operational advantage. Breaking Down HireQuest, Inc. (HQI) Financial Health: Key Insights for Investors shows how these values translate into stable business performance.

Given Company's Core Purpose

The company's underlying values are what drive its decentralized, franchise-based model, which is a smart way to scale while keeping a local, community-focused feel. They frame their purpose around solving problems in the American working world through collaboration across their entire network-from corporate leadership to the branch staff. This is a staffing company with a social conscience, and that is a rare thing.

• Integrity and Accountability: These are the essential components guiding daily work and decision-making.
• Joy: The company seeks to foster positive, fun, and supportive workplaces, recognizing that people spend at least one-third of their day on the job.
• Economic Development: They prioritize ethical practices and the creation of meaningful employment and business ownership opportunities through their franchise network.
• Compassion: They believe kindness, empathy, and patience are key to working effectively across the diverse demographics and industries they serve.

Official mission statement

The mission is clearly focused on local impact, positioning the company as a catalyst for community strength, not just a transactional service provider.

• Strengthen local communities by transforming how people find work and how work gets done.

Vision statement

HireQuest, Inc.'s vision is expansive, looking beyond temporary staffing to address fundamental issues of work and entrepreneurship on a global scale, operating in over 40 countries worldwide.

• Transforming how the world works through its divisions of brands.
• Envisioning a future where every person finds empowerment through work.
• Making entrepreneurship accessible to anyone willing to build it.
• Enabling companies to scale with confidence, anytime and anywhere.

Given Company slogan/tagline

While they use several phrases, the one that best encapsulates their mission and vision is a clear statement of their ultimate goal for the labor market.

• We're building a world where work works-for everyone.

HireQuest, Inc. (HQI) How It Works

HireQuest, Inc. operates as a national franchisor of staffing solutions, meaning it makes money primarily by collecting royalty fees from its network of over 400 independently owned and operated offices across the U.S. and internationally. This asset-light, 100% franchisee-owned model allows the corporate entity to focus on centralized support, financing, and strategic acquisitions, while franchisees handle the local client and candidate relationships.

HireQuest, Inc.'s Product/Service Portfolio

The company's portfolio is structured to cover the full spectrum of staffing needs, from immediate, blue-collar labor to highly specialized executive placements, using a stable of recognized brand names like HireQuest Direct and MRI Network. This diversification helps manage cyclical risks; for example, while system-wide sales for the first nine months of 2025 were down to $377.9 million due to a muted hiring environment, the franchise model still delivered a Q3 2025 net income of $2.3 million. Here's the quick math: the bulk of their revenue comes from franchise royalties, which hit $8.1 million in Q3 2025. You can learn more about this resilience by reading Breaking Down HireQuest, Inc. (HQI) Financial Health: Key Insights for Investors.

HireQuest, Inc.'s Operational Framework

The operational process is built on a scalable, low-overhead franchise model that centralizes risk and support while decentralizing execution. Honestly, this is the core value driver-it allows for rapid expansion without the massive capital expenditure of a corporate-owned model.

• Franchisor Role (HQI): Provides centralized back-office support, including payroll funding, billing, collections, and technology (like the standardized software platform used by all staffing offices).
• Franchisee Role: Manages all local sales, marketing, candidate recruitment, and client service, leveraging their local market knowledge.
• Revenue Generation: HQI's total revenue of $8.5 million in Q3 2025 was overwhelmingly franchise royalties, which is a percentage of the franchisee's system-wide sales.
• Financial 'Glue': The corporate entity provides the necessary working capital and financing for its staffing franchisees, which makes it defintely more difficult for them to operate independently.

HireQuest, Inc.'s Strategic Advantages

The company's competitive edge comes from its unique structure and disciplined M&A strategy, not just its size. It's a blend of financial discipline and operational flexibility.

• Asset-Light, High-Margin Model: By franchising, HQI avoids the high operating costs and direct labor liabilities of a traditional staffing agency, leading to superior operating margins for the industry.
• Acquisition Engine: Management has a proven track record, completing over $77 million in acquisitions over the last six years, which quickly expands its geographic footprint and brand portfolio.
• Diversified Brand Portfolio: Owning multiple brands (like HireQuest Health for medical staffing and DriverQuest for commercial drivers) allows it to target specific, high-growth verticals like healthcare and logistics, which are expected to see stronger demand in 2026.
• Local Market Penetration: The community-based franchise model, with over 400 offices, is better positioned to meet the rising candidate preference for local and flexible roles, giving it an edge over large, centralized competitors.

HireQuest, Inc. (HQI) How It Makes Money

HireQuest, Inc. operates on a capital-light, franchisor-focused model, meaning it primarily makes money by collecting royalty fees from its network of franchised staffing offices, not by directly managing the vast majority of temporary workers' payroll and liabilities. This structure shifts the operational burden and much of the working capital requirement to the franchisees, allowing HireQuest to generate high-margin revenue from a percentage of their system-wide sales.

HireQuest's Revenue Breakdown

In the third quarter of 2025, HireQuest's total revenue was $8.5 million, a 9.8% decline year-over-year, reflecting a soft market for staffing services. The company's revenue is overwhelmingly concentrated in one stream, which is a key characteristic of its asset-light franchise model.

Business Economics

The core of HireQuest's financial engine is the royalty fee, which is a percentage of the system-wide sales generated by its franchisees. This is a powerful, high-margin model because the company avoids the significant costs associated with direct employment, such as payroll funding, workers' compensation insurance, and unemployment taxes for the day-to-day workforce.

• Franchise Royalty Structure: Royalties represent approximately $8.1 million of the company's Q3 2025 revenue. This is a fee charged to the franchisee, typically a percentage of their gross sales, for the right to operate under the HireQuest brand names like HireQuest Direct and Snelling.
• Service Revenue: This stream, which was about $387,000 in Q3 2025, comes from services provided to franchisees, like insurance administration or other support functions. It's a minor but important component.
• System-Wide Sales (SWS): While not direct revenue, SWS is the critical metric. In Q3 2025, SWS was $133.6 million, down 10.1%. This is the base upon which royalties are calculated, so a drop here directly impacts the company's top line.
• Low Overhead Advantage: The franchise structure keeps Selling, General, and Administrative (SG&A) expenses relatively low. For example, Q3 2025 SG&A was $5.1 million, a 5.7% decrease from the prior year, demonstrating disciplined cost management even as revenue fell.

The franchise model is resilient, allowing profitability even in soft markets, but its growth is directly tied to the health of the broader labor market and the success of its franchisees. You can read more about the company's focus here: Mission Statement, Vision, & Core Values of HireQuest, Inc. (HQI).

HireQuest's Financial Performance

Despite a decline in top-line revenue, HireQuest demonstrated a significant turnaround in profitability for the first nine months of 2025, largely due to improved operational efficiency and expense control, particularly in workers' compensation costs.

• Net Income Turnaround: The company posted Q3 2025 net income of $2.3 million (or $0.16 per diluted share), a massive swing from a net loss of $(2.2 million) in the prior-year quarter.
• Year-to-Date Profitability: For the nine months ended September 30, 2025, net income was $4.73 million, a substantial increase from $1.45 million in the same period of 2024.
• Adjusted EBITDA: Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q3 2025 was $4.7 million, which translates to an impressive margin of approximately 55% on total revenue, showcasing the efficiency of the franchise royalty model. That's a strong indicator of core business health.
• Key Ratios: The company maintains a healthy financial profile with a Q3 2025 net margin of 7.47% and a Return on Equity (ROE) of 13.88%, suggesting effective use of shareholder capital.
• Liquidity and Dividends: As of September 30, 2025, cash was $1.1 million and working capital stood at $31.5 million. The company declared a $0.06 quarterly cash dividend, which is a consistent return to shareholders, though the high payout ratio warrants defintely close monitoring.

HireQuest, Inc. (HQI) Market Position & Future Outlook

HireQuest, Inc. maintains a resilient position in the fragmented US staffing market, primarily through its asset-light franchise model, which helps it stay profitable even during industry downturns. While the overall US staffing market is forecasted to grow to roughly $198.17 billion in 2025, the company's focus on disciplined expense management and strategic acquisitions is key to driving its projected full-year 2025 Earnings Per Share (EPS) of approximately $0.64.

The company's strategic focus is on leveraging its network of over 400 offices to capture localized demand, positioning it as a strong, smaller-cap player against national giants. Its trailing twelve-month (LTM) revenue, primarily from franchise royalties and fees, was $31.69 million as of Q3 2025, but the total volume of business generated by its network (system-wide sales) is the real measure of its market reach.

Competitive Landscape

HireQuest operates in the highly competitive industrial staffing segment, which was valued at approximately $38.6 billion in 2024. Its franchise model gives it a distinct cost structure, but it remains a small-scale player compared to the industry leaders who dominate with national contracts and massive scale.

Here's the quick math: HireQuest's estimated market share is based on its annualized system-wide sales (roughly $534.4 million) relative to the total US industrial staffing market, which shows you just how fragmented this space defintely is outside of the top five firms.

Opportunities & Challenges

The company is strategically positioned to capitalize on a stabilizing labor market but must navigate persistent softness in higher-end recruiting segments and macroeconomic uncertainty.

Industry Position

HireQuest's position is unique: it is a franchisor, not an operator, which insulates it from much of the working capital risk that plagues its larger, company-owned competitors. Its financial health remains strong despite a challenging hiring environment, which you can read more about at Breaking Down HireQuest, Inc. (HQI) Financial Health: Key Insights for Investors.

• Resilient Profitability: The franchise model delivered a Q3 2025 net income of $2.3 million, a significant turnaround from a net loss in the prior-year quarter, showcasing strong expense control.
• Financial Flexibility: Working capital stood at $31.5 million as of September 30, 2025, providing a solid base for both operational support and M&A activity.
• Strategic Focus: The company is actively focusing on expanding its geographic footprint and supporting franchisees to capture local market share, especially in the temporary and day-labor staffing segments where it sees continued strength.

The company must now translate the stabilization reported by its network into renewed system-wide sales growth to justify its long-term valuation.