What alternatives to an escrow account does Mrcool have for initial fees and development fees in the state of Washington?

According to Mrcool's 2025 Franchise Disclosure Document, Mrcool must hold initial fees, including development fees, in escrow in Washington to ensure they meet pre-opening obligations. However, Mrcool offers alternatives to this escrow requirement. Instead of using an escrow account, Mrcool will not require or accept payment of any initial franchise fees or development fees until the franchisee has completed all initial training and is open for business. For development fees, Mrcool will accept payment proportionally to each franchise outlet opened, after all pre-opening obligations have been met. Mrcool can also provide a guarantee or acquire a surety bond as an alternative to the escrow account.

This amendment to the standard franchise agreement is specific to franchisees in Washington State, due to the state's Franchise Investment Protection Act. This offers some financial protection and flexibility to prospective franchisees in Washington. Instead of paying the initial fees upfront into an escrow, franchisees can delay payment until they've received the training and are ready to open, or pay the development fees as each location opens.

The option to provide a guarantee or surety bond gives Mrcool additional flexibility in meeting its obligations under Washington law. A surety bond would provide a third-party guarantee that funds are available should Mrcool fail to meet its pre-opening obligations. A guarantee would be a promise from Mrcool to fulfill its obligations.

Prospective franchisees in Washington should carefully consider these alternatives and discuss with Mrcool which option best suits their needs and circumstances. It's important to understand the implications of each option before making a decision.