Are Advertising Contributions accelerated and due immediately to Mrcool upon termination?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 17 OBLIGATIONS UPON TERMINATION, EXPIRATION AND CONTINUING OBLIGATIONS
17.A. PAYMENT OF AMOUNTS OWED TO FRANCHISOR
Without limitation as to any other Article or provision of this Agreement, upon expiration or termination of this Agreement for any reason, Franchisee shall immediately pay to Franchisor all sums and fees due from Franchisee to Franchisor under the terms of this Agreement including, but not limited to Royalty Fees and Advertising Contributions and all other sums and fees due from Franchisee to Franchisor and/or Franchisor affiliates and/or suppliers for products and services including, but not limited to, System Supplies.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, upon termination of the Franchise Agreement, a franchisee is required to immediately pay all outstanding sums and fees due to Mrcool. This includes, but is not limited to, Royalty Fees and Advertising Contributions, as well as any other outstanding payments for products and services, such as System Supplies.
This means that if a franchisee's agreement is terminated, regardless of the reason, they must promptly settle all financial obligations with Mrcool. This immediate payment requirement could place a significant financial burden on the franchisee at a time when they are also dealing with the closure of their business.
Prospective Mrcool franchisees should be aware of this obligation and factor it into their financial planning. It is crucial to understand the potential financial implications of termination and to ensure that they have a plan in place to meet these obligations should the need arise. Franchisees should also clarify with Mrcool what specific costs or fees might be outstanding upon termination to fully prepare for this scenario.