Is Article 18.K of the Mrcool Franchise Agreement relevant if a franchisee executes a Development Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Illinois Franchise Disclosure Act, 815 ILCS 705/1 to 705/45, and Ill. Admin. Code tit. 15, §200.100 et seq., the undersigned agree to the following modifications to the MRCOOL Franchising, LLC Franchise Agreement (the "Franchise Agreement") and, if Franchisor and Franchisee both sign the MRCOOL Franchising, LLC Multi-Unit Development Agreement (the "Development Agreement"), as follows:
- Article 18.F. of the Franchise Agreement, and if Franchisee executes a Development Agreement, Section 7.5 of the Development Agreement, under the heading "Governing Law", shall be amended by the addition of the following statement added after the end of the last sentence of Article 18.F. of the Franchise Agreement and Section 7.5 of the Development Agreement:
Illinois Addendum: Illinois law governs the agreements between the parties to this franchise.
Section 4 of the Illinois Franchise Disclosure Act Provides that any provision in a Franchise Agreement that designates jurisdiction or venue outside the State of Illinois is void. However, a Franchise Agreement may provide for arbitration in a venue outside Illinois.
Your rights upon termination and non-renewal of a Franchise Agreement are set forth in Sections 19 and 20 of the Illinois Franchise Disclosure Act.
Section 41 of the Illinois Franchise Disclosure Act Provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise Disclosure Act, or any other law of Illinois is void
- Article 18.G. of the Franchise Agreement, and if Franchisee executes a Development Agreement, Section 7.6 of the Development Agreement, under the heading "Choice of Law, Non-Binding Mediation, Binding Arbitration, and Consent to Jurisdiction", shall be amended by the addition of the following statement added after the end of the last sentence of Article 18.G. of the Franchise Agreement and Section 7.6 of the Development Agreement:
Illinois Addendum: Illinois law governs the agreements between the parties to this franchise.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to the 2025 Mrcool Franchise Disclosure Document, whether Article 18.K of the Franchise Agreement is relevant when a franchisee also signs a Development Agreement depends on the specific state where the franchise operates. For instance, in California, the amendment states that no statement signed by a franchisee can waive claims under state franchise law or disclaim reliance on franchisor statements, superseding any other document term. However, there is no mention of Article 18.K being specifically deleted or amended. Similarly, in New York, Article 18 of the Franchise Agreement is supplemented with a new subarticle 18.Z if the franchisee executes a Development Agreement, but again, Article 18.K is not specifically mentioned. In North Dakota, Article 18 is amended with several clauses regarding jurisdiction, choice of law, and waivers, but these do not directly address Article 18.K either.
For franchisees in Illinois, Article 18.F of the Franchise Agreement is amended, and if a Development Agreement is executed, Section 7.5 of the Development Agreement is also amended concerning governing law. Similarly, Article 18.G of the Franchise Agreement and Section 7.6 of the Development Agreement are amended regarding choice of law, mediation, arbitration, and jurisdiction. In Minnesota, Articles 14.C and 15.B of the Franchise Agreement are supplemented with language concerning franchisee rights and causes of action under Minnesota franchise law. However, none of these amendments explicitly mention Article 18.K.
In summary, while several states have amendments that affect Article 18 of the Mrcool Franchise Agreement when a Development Agreement is also in place, none of the provided excerpts specifically address Article 18.K. A prospective franchisee should review the state-specific amendments in the FDD carefully and consult with a legal professional to understand how these amendments, or lack thereof, impact the enforceability and interpretation of Article 18.K in their specific circumstances, especially if they are entering into a Development Agreement.