HireQuest, Inc. (HQI): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of HireQuest, Inc. (HQI), and honestly, the engine driving this whole operation is its asset-light franchise structure. Forget heavy capital expenditure; this model lets them scale by collecting $7.0 million in Q1 2025 franchise royalties alone, supporting a massive $377.9 million in Total System-wide Sales through Q3 2025. We see them actively fueling growth through strategic M&A-like that $929,000 spend in Q2 2025-while keeping corporate overhead tight, evidenced by SG&A at $16.2 million YTD Q3 2025. It's a lean, powerful setup built on supporting over 330 independent owners; check out the full Business Model Canvas below to see exactly how they structure value across all nine blocks.

HireQuest, Inc. (HQI) - Canvas Business Model: Key Partnerships

You're looking at the backbone of HireQuest, Inc. (HQI)'s decentralized model, which relies heavily on its network of independent operators and strategic alliances to drive revenue. This structure is key to how they manage risk and scale, especially given the current market environment.

The core of the Key Partnerships block is the franchise network itself. This isn't just a list of partners; it's the primary mechanism for service delivery. As of late 2025, HireQuest, Inc. (HQI) supports a network of 330 Franchise Owners operating across 47 states and Washington, D.C., plus locations in over 40 countries globally, leveraging brands like Snelling and TradeCorp.

The financial health of these partnerships is reflected in the royalty stream. For the third quarter of 2025, Franchise royalties, which are the primary revenue driver for HireQuest, Inc. (HQI), totaled $8.1 million. System-wide sales across the entire franchise network for that same quarter reached $133.6 million.

Here's a quick look at the scale of the network and recent financial performance tied to these relationships:

Metric	Value (as of late 2025)	Context/Period
Total Franchise Owners	330	Network Size
Total Global Locations	440	Network Footprint
System-Wide Sales	$133.6 million	Q3 2025
Franchise Royalties Revenue	$8.1 million	Q3 2025
Total Acquisitions Completed (Last Decade)	Over $77 million	Since Command Center merger

The company actively cultivates relationships with external entities to support franchisee operations and drive growth. This includes pursuing strategic acquisitions, which management noted in Q3 2025 they expect to see increased activity in over the next three to six months, with several accretive opportunities under review.

For operational efficiency, HireQuest, Inc. (HQI) partners with specialized external service providers:

• Group Purchasing Organizations (GPOs): A notable collaboration exists with HPS, a member-owned GPO serving over 5000 Members across 37 states. This partnership is designed to help HireQuest, Inc. (HQI)'s members meet staffing needs while leveraging GPO buying power for better procurement terms.
• Payroll and Workers' Compensation Insurance Providers: Managing employment risk is critical. The focus on cost control has yielded results, with Net workers' compensation expense decreasing significantly to $127,000 in Q2 2025, down from $547,000 in the prior year period. This suggests effective partnership management or favorable terms with their insurance carriers.
• Technology Vendors: While specific vendor names aren't public, the model relies on 'Purpose-built proprietary software solutions' to support franchisees, indicating a partnership or internal development strategy focused on modern, secure tools for staffing operations.

Finance: draft 13-week cash view by Friday.

HireQuest, Inc. (HQI) - Canvas Business Model: Key Activities

You're looking at the essential engine room of HireQuest, Inc. (HQI)-the things the corporate center absolutely must do well to keep the franchise machine running profitably. These aren't just tasks; they are the core value delivery mechanisms.

Strategic M&A to acquire new staffing brands

Acquisition is a stated key growth strategy. Management is actively looking at deals, noting that the current market status makes this an especially interesting time for finding opportunities, particularly as smaller firms or long-term owners might be planning exits. David Hartley, the CFO who succeeded Steve Crane on May 31, 2025, brings experience architecting over 15 acquisitions, which is definitely relevant here. The company operates a portfolio of brands including HireQuest Direct, HireQuest Health, MRINetwork, Snelling Staffing, and TradeCorp, which are all managed under the central structure. A recent structural activity involved the Ownership Structure Change of MRINetwork to a New Leadership Group of Franchise Owners, announced on December 1, 2025. The CEO noted in November 2025 that there are several opportunities being looked at that could be immediately accretive to the HireQuest model.

Centralized back-office and compliance support

This activity is about taking the administrative load off the franchisees. The corporate structure handles the heavy lifting on compliance, which is crucial in the staffing world. You can see the efficiency gains in the numbers, even when transaction costs spike. For instance, Selling, General & Administrative (SG&A) expenses in the second quarter of 2025 hit $5.9 million, an increase of 10.8% year-over-year, primarily due to $929,000 in transaction expenses realized that quarter. Still, in the first quarter of 2025, the company managed to reduce SG&A expenses by 6.5%. Compliance and risk management show up in areas like workers' compensation; net workers' compensation expense for the second quarter of 2025 dropped significantly to $127,000, down from $547,000 in the second quarter of 2024. The balance sheet reflects this centralized management, with current liabilities representing 42% of current assets as of September 30, 2025.

Franchisee training and ongoing business consulting

The health of the franchise model is directly tied to royalty revenue, which is the primary source of HireQuest, Inc.'s revenue. Franchise royalties for the first quarter of 2025 were $7.0 million, a decrease of 11.2% year-over-year. In the second quarter of 2025, royalties were $7.3 million, compared to $8.2 million the prior year. As of the end of 2023, the company supported 237 active franchise locations across 48 U.S. States. The difference in operating models is important; the traditional model, like HireQuest Direct, features a tight network sharing the same name brand and operating standards, which suggests more direct control over training and consulting than the more independent MRI network offices.

Managing the national accounts sales pipeline

This activity focuses on securing and servicing larger, multi-location clients, often through specific brands like Snelling. System-wide sales, which serve as a contextual indicator of overall office activity, were $133.6 million for the third quarter of 2025. For the second quarter of 2025, system-wide sales were $125.9 million, which was a sequential increase of 6% from the first quarter of 2025. The company's overall client base was reported at 8,742 active corporate clients as of 2023. While Snelling performed well in Q3 2025, the permanent placement and executive search segment, largely represented by the MRI network, continues to lag.

Maintaining the core technology platform

The proprietary, vertically integrated technology platform is a key differentiator, managing everything from candidate onboarding to client invoicing. The Chief Information Officer is responsible for developing and maintaining these software systems. The platform uses 3 integrated systems for workforce management, according to 2023 data. Managing the flow of funds through this system is evident in the Accounts Receivable figures. Net accounts receivable stood at $46.9 million as of September 30, 2025, up from $42.3 million at the end of 2024. The company maintained $31.5 million in working capital as of September 30, 2025.

Here's a quick look at the key financial scale indicators for the first three quarters of 2025:

Metric	Q1 2025	Q2 2025	Q3 2025	As of 12/31/2024
Total Revenue	$7.5 million	$7.6 million	$8.5 million	$34.60 million (Annual 2024)
Franchise Royalties	$7.0 million	$7.3 million	Not Explicitly Stated	Not Explicitly Stated
System-Wide Sales	Not Explicitly Stated	$125.9 million	$133.6 million	Not Explicitly Stated
Net Income (GAAP)	$1.4 million	$1.1 million	$2.3 million	Not Explicitly Stated
Net Accounts Receivable	$42.2 million (3/31/25)	$42.8 million (6/30/25)	$46.9 million (9/30/25)	$42.3 million

Finance: draft 13-week cash view by Friday.

HireQuest, Inc. (HQI) - Canvas Business Model: Key Resources

You're looking at the core assets that power HireQuest, Inc. (HQI) as of late 2025. These aren't the physical factories or massive inventories of a manufacturer; instead, they are intangible assets and structural advantages that keep the company lean and scalable.

The 100% franchised, asset-light business model is the foundation here. This structure means HireQuest, Inc. (HQI) minimizes direct operational risk and capital expenditure by relying on franchisees to manage local operations. The financial proof is in the revenue mix; for the first quarter of 2025, franchise royalties accounted for $7 million of the total revenue of $7.5 million. This focus on royalties over direct service revenue is the essence of the asset-light approach.

The strength of the model is supported by a portfolio of established brands. These brands allow HireQuest, Inc. (HQI) to serve diverse segments of the staffing market, from light industrial to executive search. As of late 2025, the company provides solutions through divisions that include HireQuest Direct, Snelling Staffing, and others. A major recent development involves the MRINetwork brand, where majority ownership transitioned to a new leadership group of franchise owners on December 1, 2025, though HireQuest, Inc. (HQI) retains partial ownership and continues to supply essential infrastructure.

Here's a look at the key brands and the recent structural change:

Brand/Division	Staffing Focus Area	Key 2025 Event/Status
Snelling Staffing	Light industrial and administrative staffing	Achieved 'big wins' in Q3 2025.
MRINetwork	Executive search	Majority ownership transitioned to franchise owner group (Dec 1, 2025).
HireQuest Direct / HireQuest	Direct dispatch, commercial staffing	Part of the core franchise system supporting day labor demand.
TradeCorp / HireQuest Health	Specialized staffing segments	Part of the overall portfolio providing diverse solutions.

Capital readiness for growth is a key resource, evidenced by the balance sheet. As of March 31st, 2025, HireQuest, Inc. (HQI) reported an available credit line of $34.8 million, against which only $5.5 million was drawn. This capacity is explicitly noted as providing the flexibility to capitalize on potential acquisitions, especially as management noted deal pricing was becoming more reasonable.

The experienced corporate leadership team provides the strategic direction. The management team shows a seasoned background, with an average tenure of 6.4 years. The CEO, Richard Hermanns, has been in his role since July 2019. Furthermore, the transition of the Chief Financial Officer role in 2025 highlights a focus on corporate development, as the successor, David Hartley, joined in 2020 and has been instrumental in executing over fifteen acquisitions. This team's experience is a critical intangible asset.

The final piece of the resource puzzle is the proprietary staffing software and IT infrastructure. While the specific financial investment in this area isn't itemized in the public reports, the company's commitment is clear: HireQuest, Inc. (HQI) continues to support its brands with essential infrastructure and shared services, which is a key component of the post-transaction agreement with the new MRINetwork leadership group. This centralized technology backbone supports the network's operations.

• Average Management Tenure: 6.4 years.
• Credit Facility Availability (as of Q1 2025): $34.8 million.
• Credit Facility Drawn (as of Q1 2025): $5.5 million.
• Acquisitions Executed by New CFO (since 2020): Over fifteen.
• Franchise Royalties as % of Q1 2025 Revenue: Approximately 93.3% ($7.0M / $7.5M).

Finance: draft 13-week cash view by Friday.

HireQuest, Inc. (HQI) - Canvas Business Model: Value Propositions

High-margin, asset-light model for the franchisor

HireQuest, Inc. (HQI) maintains a structure where the franchisor's financial health shows strong profitability metrics derived from its royalty stream.

Metric	Value (As of Late 2025)
Trailing Twelve-Month Operating Margin	23.56%
Trailing Twelve-Month Net Margin	21.93%
Total Assets (September 30, 2025)	$94.9 million
Total Liabilities (September 30, 2025)	$27.1 million
Debt-to-Equity Ratio (TTM)	0.03
Q3 2025 Net Income	$2.3M
Q3 2025 Adjusted EBITDA	$4.7M

The company operates a 100% franchise model, with 84 locations as of the latest data.

Franchise Royalties for the nine months ended September 30, 2025, were $22.4 million.

Proven business systems and low initial investment for franchisees (defintely a plus)

The upfront commitment for a new owner is structured within a defined range, supported by performance benchmarks.

Franchise Fee Component	Range
Total Investment Range	$45,000 to $146,000
Initial Franchise Fee	$2,500 to $25,000
Minimum Cash Required	$15,000

The Franchise Payback Period is estimated between 2.9-4.9 years.

Example Yearly Gross Sales reported were $439,904, with Owner Operator Estimated Earnings in the range of $52,789 - $79,183.

Ongoing fee structures include:

• HireQuest Direct royalty: 6% to 8% of gross temporary labor sales
• HireQuest brand royalty: 4.5% of payroll funded by the franchisor plus 18% of the gross margin

Rapid, on-demand temporary labor for clients

The collective system generates significant top-line activity, reflecting the demand for on-demand staffing.

System-wide sales for Q3 2025 reached $133.6 million.

System-wide sales for the first nine months of 2025 totaled $377.9 million.

Full-service payroll, tax, and workers' comp management for franchisees

The franchisor absorbs certain administrative burdens, as evidenced by specific expense line items.

For the third quarter of 2025, workers' compensation swung to a benefit of about $99,000.

Interest and other financing expense in Q3 2025 was approximately $63,000.

Specialized recruiting across multiple verticals (e.g., healthcare, executive search)

The business operates through several distinct brands to cover diverse market needs.

Brands include HireQuest Direct, Snelling Staffing, TradeCorp, MRINetwork, DriverQuest, HireQuest Health, and Northbound Executive Search.

Industries served include construction, light industrial, healthcare, finance, manufacturing, cybersecurity, and engineering.

HireQuest Health is one of the specialized divisions.

Northbound Executive Search focuses on executive search.

TradeCorp staffs construction and light industrial worksites.

HireQuest, Inc. (HQI) - Canvas Business Model: Customer Relationships

Dedicated corporate support for the 330 franchisees is a core relationship element for HireQuest, Inc. (HQI). This support structure is built on the company's 25 years of experience successfully and profitably operating through various economic cycles. The corporate structure provides comprehensive back-office assistance across multiple functions to these franchise owners.

The localized, community-based service delivery is facilitated through a network that includes 440 Locations Globally. Franchisees operate across 47 states and Washington, D.C., plus in over 40 countries worldwide. This broad footprint allows for community-level engagement while being backed by the national franchisor.

For executive search clients, the approach is described as high-touch and consultative. This segment, which operates under brands like Northbound Executive Search, has faced a sharper downturn over the past ten quarters, though franchisees have recently started to see some improvement in recent months as of Q3 2025. The company's total revenue for the third quarter of 2025 was $8.5 million, with franchise royalties making up the primary component at $8.1 million for that quarter.

Standardized, automated back-office processes are a key component of the HireQuest Advantage offered to franchisees. This includes purpose-built proprietary software solutions designed for modern, secure operations. The system-wide sales for the first nine months of 2025 reached $377.9 million.

Key relationship and performance metrics as of late 2025 include:

Metric	Value (Latest Reported Period)
Franchise Owners	330
Locations Globally	440
Q3 2025 Franchise Royalties	$8.1 million
System-wide Sales (9 Months Ended Sept 30, 2025)	$377.9 million
Total Debt (End of Q2 2025)	Roughly $16 million (prior year comparison point)

The support structure provided to the franchise community encompasses several critical areas:

• Accounting and operations support
• Safety and IT services
• Recruiting and marketing assistance
• Proprietary software solutions use
• Franchisee royalty fee structure (e.g., 6% to 8% of gross temporary labor sales for HireQuest Direct)

HireQuest, Inc. (HQI) - Canvas Business Model: Channels

You're looking at how HireQuest, Inc. (HQI) gets its services-staffing and recruiting-to the end customer, which is heavily weighted toward its franchise network as of late 2025. The channels are a mix of decentralized local execution and centralized corporate support.

Network of over 400 franchised office locations

• The nationwide network of franchise offices supports on-demand staffing and corporate recruiting across industries.
• As of late 2025, the network represents more than 400 offices across its various brands.
• Globally, the footprint extends to 440 Locations Globally.
• Franchisees operate in 47 states and Washington, D.C., plus in over 40 countries worldwide.

The entire operational footprint is 100% Franchisee-Owned, with 330 Franchise Owners driving local market penetration.

Corporate National Accounts sales team

This team serves as a key channel for securing large, multi-location business. The HireQuest Direct division, for example, has a dedicated National Accounts Director and supports customers in 27 States + Washington, D.C.. This centralized effort feeds business opportunities into the local franchise offices, providing a ready-to-roll customer-base in many markets.

Branded digital job portals and online applications

Digital channels are used for efficiency in the client-employer relationship. The proprietary portal is the mechanism for clients to submit job orders, track candidate progress, approve timesheets, and access invoicing and billing information. While specific 2025 usage statistics aren't public, this system is vital for managing the high volume of transactions generated by the network.

Direct sales and local business development by franchisees

The franchisees themselves are the primary sales force, executing direct sales and local business development daily. This local effort is what generates the bulk of the company's revenue through royalty fees. The performance of this channel is directly reflected in the system-wide sales figures.

Here's a quick look at the scale of the network and the financial results tied to these channels through the first half of fiscal year 2025:

Metric	Value (Latest Reported Period)	Context/Period
Total Franchised Locations (Approximate)	400+	Late 2025 Outlook Data
Total Franchise Owners	330	As of Late 2025 Data
Franchise Royalties Revenue	$7 million	Q1 2025
System-Wide Sales	$125.9 million	Q2 2025
Service Revenue (Franchisee Support)	$354,000	Q2 2025
Geographic Reach (HireQuest Direct)	27 States + Washington, D.C.	National Accounts Channel Support

The reliance on royalties means that the health of the franchisee's local sales channel directly impacts HireQuest, Inc.'s top-line revenue. The sequential growth in System-Wide Sales of +6% from Q1 2025 to Q2 2025 suggests some stabilization in the underlying local business development efforts.

Finance: draft 13-week cash view by Friday.

HireQuest, Inc. (HQI) - Canvas Business Model: Customer Segments

You're looking at the client base for HireQuest, Inc. (HQI) as of late 2025. This is a network built on franchising, serving a wide spectrum of business needs from the job site to the executive suite.

Franchise owners seeking a proven staffing business model

This group is the core of HireQuest, Inc.'s structure. They are entrepreneurs buying into a system that is 100% franchisee-owned. As of the latest data, the network consists of 330 Franchise Owners. The initial investment to start one of these franchised facilities averages between $45,000 and $146,000. The ongoing financial commitment involves royalty fees; for HireQuest Direct, this is 6% to 8% of gross temporary labor sales, while the core HireQuest brand requires 4.5% of payroll funded by the franchisor plus 18% of the gross margin.

Small-to-midsize businesses needing temporary/day labor (construction, light industrial)

These businesses form the high-volume segment, relying on the network's general and skilled labor offerings, primarily in construction, industrial, and manufacturing industries. While the broader economic environment presented challenges, the CEO noted that franchisees saw bright spots in this area during the third quarter of 2025. System-wide sales for the first nine months of 2025 totaled $377.9 million.

Companies requiring professional and executive search services (MRINetwork)

This segment is served through the MRINetwork brand, which focuses on executive search and permanent placement. In a significant structural change announced in December 2025, HireQuest, Inc. transitioned majority ownership of MRINetwork to a new leadership group composed of franchise owners, though HireQuest retains partial ownership and continues to provide shared services. This move was intended to capture growth in an executive search market showing signs of renewed momentum headed into 2026.

Businesses in specialized sectors like healthcare and commercial driving

The network supports specialized needs through dedicated brands like DriverQuest and HireQuest Health. Staffing solutions are provided across sectors including healthcare, hospitality, CDL/non-CDL driving, and disaster restoration. The overall financial performance for HireQuest, Inc. reflects the demand across all these areas.

Here are the key financial figures relevant to the revenue generated from these customer segments for the 2025 fiscal year reporting periods:

Metric	Q3 2025 Amount	Year-to-Date (9 Months) 2025 Amount	TTM as of Sep 30, 2025
Total Revenue	$8.5 million	$23.6 million	$31.69 Million USD
Franchise Royalties	$8.1 million	$22.4 million	N/A
Service Revenue	$387,000	$1.3 million	N/A
System-wide Sales	$133.6 million	$377.9 million	N/A

The resilience of the model is shown in the profitability metrics; Adjusted Net Income for Q3 2025 was $3.4 million, up from $2.8 million in Q3 2024.

You should track the performance of the MRINetwork segment closely post-transition, especially given the reported improvement in executive search activity in recent months as of Q3 2025. Finance: draft 13-week cash view by Friday.

HireQuest, Inc. (HQI) - Canvas Business Model: Cost Structure

Corporate Selling, General, and Administrative (SG&A) expenses for HireQuest, Inc. (HQI) year-to-date through the third quarter of 2025 were $16.2 million.

Costs related to strategic acquisitions included $929,000 in transaction expenses recognized during the second quarter of 2025.

Due to effective management of the workers' compensation program, the expense for the nine months ended September 30, 2025, was only a benefit of approximately $56,000.

The Cost Structure also includes technology maintenance and development costs, and franchisee support and training overhead.

Here are some of the key cost components for the periods reported in late 2025:

Cost Component	Period/Metric	Amount/Value
Corporate SG&A Expenses (YTD)	YTD Q3 2025	$16.2 million
Workers' Compensation Expense (YTD)	YTD Q3 2025 (Benefit)	($56,000)
Transaction Expenses (Acquisition)	Q2 2025	$929,000
SG&A Expenses (Quarterly)	Q3 2025	$5.1 million
Net Workers' Comp (Quarterly)	Q3 2025 (Benefit)	($99,000)

The quarterly SG&A for the third quarter of 2025 was $5.1 million, showing a decrease from the prior-year quarter.

The company's focus on expense control is evident in the workers' compensation line:

• Workers' compensation for Q3 2025 was a benefit of just under $100,000.
• This compares favorably to a net expense of $499,000 in Q3 2024.

Core SG&A, which excludes workers' comp, MRI ad fund expenses, and other non-recurring items, was $4.6 million for the third quarter, flat with the prior year.

The structure also allocates funds for ongoing operational support:

• Franchise royalties, while a revenue item, are directly tied to the cost of supporting the franchise system.
• The company maintains a franchise-focused corporate support team and proven training programs.

Finance: review the Q4 2025 expense forecast against these YTD 9-month actuals by next Tuesday.

HireQuest, Inc. (HQI) - Canvas Business Model: Revenue Streams

You're looking at the core engine that drives HireQuest, Inc. (HQI), which is heavily weighted toward its franchise network. The model is designed to generate recurring, high-margin revenue from franchisees rather than relying on direct operational sales.

The primary revenue source is franchise royalties, which are a percentage of the underlying system-wide sales generated by the franchisees. For the first quarter of 2025, franchise royalties totaled $7.0 million. This highlights the direct link between franchisee success and HireQuest, Inc. (HQI) top-line performance.

Beyond royalties, HireQuest, Inc. (HQI) collects revenue from other franchisee-related fees. These include:

• Initial franchise fees upon new unit openings.
• Ongoing service fees charged to the franchise network.

The company also records service revenue, which is generated from certain services and interest charged to its franchisees, plus other miscellaneous revenue. For the nine months ended September 30, 2025 (YTD Q3 2025), this service revenue was $1.3 million. For the third quarter alone, service revenue was $387,000.

Revenue from company-owned operations is minimal because the business model is structured to be almost entirely franchised. The focus is on managing and supporting the network, not running the day-to-day staffing operations across the board.

To put the scale into perspective, the total activity across the entire network is captured by System-wide Sales. As of Year-to-Date Q3 2025, Total System-wide Sales reached $377.9 million. This number is a key indicator of the health of the underlying business, even though it is not recorded as revenue on HireQuest, Inc. (HQI)'s income statement.

Here's a look at the key revenue components for the nine months ended September 30, 2025, compared to the requested Q1 2025 data point:

Revenue Component	Nine Months Ended Q3 2025 (YTD)	Q1 2025 Specific Data
Franchise Royalties (Company Revenue)	$22.4 million	$7.0 million
Service Revenue (Company Revenue)	$1.3 million	$387,000 (Q3 2025 only)
Total Company Revenue (YTD)	$23.6 million	$7.5 million (Q1 2025 Total Revenue)
Total System-wide Sales (YTD)	$377.9 million	$118.4 million (Q1 2025 System-wide Sales)

The structure clearly shows that franchise royalties are the bedrock. If you look at Q3 2025, franchise royalties were $8.1 million out of total revenue of $8.5 million. That's about 95% of the reported revenue coming from the royalty stream in that specific quarter.