The Discourses on the first ten chapters of Pliny are his discussion of rRepublics, just as much as the Prince was his discussion of principalities. He states his point of view on the use of mercenaries by republics in the Discourses (which is not nearly as popular a read as The Prince, since The Prince is short and pithy, while the Discourses are long and verbose).
Basically, Republics that start widespread and long-term use of mercenaries tend not to remain Republics for long. He also thinks this is a bad thing.