| Basis of Presentation and Significant Accounting Policies [Text Block] | Note 1 Nature of Business HireQuest, Inc. (together with its subsidiaries, “HQI, the “Company,” “we,” us,” or “our”) is a nationwide franchisor of offices providing direct-dispatch and commercial staffing solutions in the light industrial and blue-collar segments of the staffing industry and traditional commercial staffing. Our franchisees provide various types of temporary personnel through two On January 24, 2022 three February 21, 2022 February 28, 2022 Note 2 On March 1, 2021, March 22, 2021, October 1, 2021 December 6, 2021 As of March 31, 2022 2 Basis of Presentation We have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the periods presented. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report filed on Form 10 December 31, 2021 not Consolidation The consolidated financial statements include the accounts of HQI and all of its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. U.S. GAAP requires the primary beneficiary of a variable interest entity (“VIE”) to consolidate that entity. To be the primary beneficiary of a VIE, an entity must have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that are significant to the beneficiary. We provide acquisition financing to some of our franchisees that could result in our having to absorb losses. This results in some franchisees being considered VIEs. We have reviewed our relationship with each of these franchisees and determined that we are not not Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results could differ from those estimates. Significant estimates and assumptions underlie our workers’ compensation claim liabilities, our workers’ compensation risk management incentive program accrual, our deferred taxes, the reserve for losses on notes receivable, and the estimated fair value of assets acquired and liabilities assumed. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of amounts due for labor services from customers of franchisees and of accounts receivable originating at company-owned locations. At March 31, 2022 December 31, 2021 42 84 not For staffing services provided by company-owned offices, we record accounts receivable at face value less an allowance for doubtful accounts. We determine the allowance for doubtful accounts based on historical write-off experience, the age of the receivable, other qualitative factors and extenuating circumstances, and current economic data which represents our best estimate of the amount of probable losses on these accounts receivable, if any. We review the allowance for doubtful accounts periodically and write off past due balances when it is probable that the receivable will not March 31, 2022 December 31, 2021, Revenue Recognition Our primary source of revenue comes from royalty fees based on the operation of our franchised offices. Royalty fees from our HireQuest Direct business model are based on a percentage of sales for services our franchisees provide to customers, which ranges from 6% to 8%. Royalty fees from our HireQuest business line, including HireQuest franchisees, DriverQuest franchisees, the Northbound franchise, and Snelling and Link franchisees who executed new franchise agreements upon closing, are 4.5% of the payroll we fund plus 18% of the gross margin for the territory. Royalty fees from the Snelling and Link franchise agreements assumed and not not For franchised locations, we recognize revenue when we satisfy our performance obligations. Our performance obligations primarily take the form of a franchise license and promised services. Promised services consist primarily of paying temporary employees, completing all statutory payroll related obligations, and providing workers' compensation insurance on behalf of temporary employees. Because these performance obligations are interrelated, we do not For owned locations, we account for revenue when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Revenue derived from owned locations is recognized at the time we satisfy our performance obligation. Our contracts have a single performance obligation, which is the transfer of services. Because our customers receive and consume the benefits of our services simultaneously, our performance obligations are satisfied when our services are provided. Revenue from owned locations is reported net of customer credits, discounts, and taxes collected from customers that are remitted to taxing authorities. Our customers are invoiced every week and we do not 30 no not one Below are summaries of our franchise royalties disaggregated by business model (in thousands): Three months ended March 31, 2022 March 31, 2021 HireQuest Direct $ 3,532 $ 2,906 HireQuest, Snelling, DriverQuest, & Northbound 3,041 353 Total $ 6,573 $ 3,259 Service revenue, which forms the other component of our total revenue, consists of interest we charge our franchisees on overdue customer accounts receivable, trademark license fees, and other fees for optional services we provide. We recognize interest income based on the effective interest rate applied to the outstanding principal balance of overdue accounts. We recognize revenue from trademark license fees as we earn them. We recognize revenue from optional services as we provide them. Notes Receivable Notes receivable consist primarily of amounts due to us related to the financing of franchised locations. We report notes receivable at the principal balance outstanding less an allowance for losses. We charge interest at a fixed rate and interest income is calculated by applying the effective rate to the outstanding principal balance. Notes receivable are generally secured by the assets of each location and the ownership interests in the franchise. We monitor the financial condition of our debtors and record provisions for estimated losses when we believe it is probable that our debtors will be unable to make their required payments. We evaluate the potential impairment of notes receivable based on various analyses, including estimated discounted future cash flows, at least annually and whenever events or changes in circumstances indicate that the carrying amount of the assets may not March 31, 2022 December 31, 2021 Intangible Assets Intangible assets acquired are recorded at fair value. We test our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not may not not 2022 2021. Finite-lived intangible assets are amortized using the straight-line method over their estimated useful lives, which ranges from 7 to 15 years. Our finite-lived intangible assets include acquired franchise agreements, acquired customer lists, and purchased software. Our indefinite-lived intangible assets include an acquired domain name. For additional information related to significant additions to intangible assets, see Note 2 Intangible assets internally developed are measured at cost. We capitalize costs to develop or purchase computer software for internal use which are incurred during the application development stage. These costs include fees paid to third not The table below reflects information related to our intangible assets (in thousands). March 31, 2022 December 31, 2021 Estimated useful life Gross Accumulated amortization Net Gross Accumulated amortization Net Finite-lived intangible assets: Franchise agreements 15 years $ 19,916 $ (1,418 ) $ 18,498 $ 19,916 $ (1,068 ) $ 18,848 Customer lists 10 years 3,034 (62 ) 2,972 2,089 (239 ) 1,850 Purchased software 7 years 3,200 (229 ) 2,971 3,200 (114 ) 3,086 Internally developed software 7 years 1,079 - 1,079 916 - 916 Total finite-lived intangible assets 27,229 (1,709 ) 25,520 26,121 (1,421 ) 24,700 Indefinite-lived intangible assets: Domain name Indefinite 2,226 - 2,226 2,226 - 2,226 Trade name Indefinite 1,511 - 1,511 - - - Total intangible assets $ 30,966 $ (1,709 ) $ 29,257 $ 28,347 $ (1,421 ) $ 26,926 Earnings per Share We calculate basic earnings (loss) per share by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding. We do not March 31, 2022 March 31, 2021 We use the treasury stock method to calculate the diluted common shares outstanding which were as follows: Three months ended March 31, 2022 March 31, 2022 Weighted average number of common shares used in basic net income per common share 13,526 13,603 Dilutive effects of unvested restricted stock and stock options 133 196 Weighted average number of common shares used in diluted net income per common share 13,659 13,799 Fair Value Measures Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three may Level 1: Level 2: Level 3: The carrying amounts of cash, accounts receivable, accounts payable and all other current liabilities approximate fair values due to their short-term nature. The fair value of notes receivable approximates the net book value and balances are reviewed for impairment at least annually. The fair value of the term loan payable approximates its carrying value. The fair value of impaired notes receivable are determined based on estimated future payments discounted back to present value using the notes effective interest rate. March 31, 2022 Description Total Level 1 Level 2 Level 3 Cash $ 1,826 $ 1,826 $ - $ - Notes receivable 4,322 - 4,322 - Accounts receivable 41,300 - 41,300 - Notes receivable - impaired 140 - 140 Total assets at fair value $ 47,588 $ 1,826 $ 45,622 $ 140 Term loan payable $ 4,513 $ - $ 4,513 $ - Line of credit 5,464 - 5,464 - Total liabilities at fair value $ 9,977 $ - $ 9,977 $ - December 31, 2021 Description Total Level 1 Level 2 Level 3 Cash $ 1,256 $ 1,256 $ - $ - Notes receivable 4,027 - 4,027 - Accounts receivable 38,239 - 38,239 - Notes receivable - impaired 140 - 140 Total assets at fair value $ 43,662 $ 1,256 $ 42,266 $ 140 Term loan payable $ 3,066 $ - $ 3,066 $ - Line of credit 171 - 171 - Total liabilities at fair value $ 3,237 $ - $ 3,237 $ - For additional information related to our impaired notes receivable, see Note 10 Discontinued Operations Company-owned offices that have been disposed of by sale, disposed of other than by sale or are classified as held-for-sale are reported separately as discontinued operations, In addition, a newly acquired business that on acquisition meets the held-for-sale criteria will be reported as discontinued operations. Accordingly, the assets and liabilities, operating results, and cash flows for these businesses are presented separate from our continuing operations, for all periods presented in our consolidated financial statements and footnotes, unless indicated otherwise. The assets and liabilities of a discontinued operation held for sale are measured at the lower of the carrying value or fair value less cost to sell. Savings Plan We have a savings plan that qualifies under Section 401 401 may first 3% 3%, March 31, 2022 March 31, 2021, Recently Issued Accounting Pronouncements In June 2016, 2016 13, 326 not December 15, 2022, December 15, 2018, We do not |
