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3. Discontinued Operations

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Prior to October 2019, we operated a number of company-owned offices. All of these company-owned offices were sold, the vast majority becoming franchisees, and we now no longer operate any company-owned offices. Operating results from company-owned offices are included in our consolidated financial statements as discontinued operations. The income from discontinued operations as reported on our consolidated statements of operations was comprised of the following amounts:

		Three months ended								Nine months ended
		September 30, 2020				September 29, 2019				September 30, 2020				September 29, 2019
Revenue		$	-			$	13,551,950			$	-			$	13,934,276
Cost of staffing services			-				9,390,509				-				9,710,757
Gross profit			-				4,161,441				-				4,223,519
Gain on sale			-				393,697				-				393,697
Selling, general and administrative expense			-				(3,644,907	)			-				(3,653,541	)
Net income before tax			-				910,231				-				963,675
Provision for income taxes			-				227,557				-				240,919
Net income		$	-			$	682,674			$	-			$	722,756

We continue to be involved with the offices we sold through franchise agreements. The term of our franchise agreement is five years, subject to renewal at the end of the current term. Franchise royalties from sold locations that subsequently became franchisees were approximately $681,000 and $708,000, for the three months ended September 30, 2020 and September 29, 2019 respectively. Franchise royalties from these locations were approximately $2.0 million and $708,000 for the nine months ended September 30, 2020 and September 29, 2019, respectively.