Besides the franchisee, who else must personally guarantee the obligations to Mrcool under the Franchise Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
You and, if you are a Corporate Entity, each of your members, shareholders and/or partners (collectively, "Owners"), must personally guarantee all of your obligations to us under the Franchise Agreement. Each Owner and the spouse of each Owner must personally guarantee your obligations to us under the Franchise Agreement. You and each Owner and spouse must also promise in writing that, among other things, during the term of the Franchise Agreement you will not participate in any business that in any way competes with the Franchised Business, and that for 24 months after the expiration of termination of the Franchise Agreement (with said period being tolled during any periods of non-compliance), neither you nor your Owners and their spouses will participate in any competitive business located within and/or servicing customers located within your Designated Territory and a 25 mile radius surrounding your Designated Territory. Further you will not participate in any competitive business located within and/or servicing customers located within a 10 mile radius of any other MRCOOL Center and/or the designated territory of any other MRCOOL Center. Your managers and all other employees and agents with access to our confidential information will be required by us to sign a confidentiality agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 42)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, if the franchisee is a corporate entity, each of its members, shareholders, and/or partners, must personally guarantee all of the franchisee's obligations to Mrcool under the Franchise Agreement. Additionally, the spouse of each owner must also personally guarantee these obligations.
This requirement means that Mrcool seeks to ensure that there are multiple parties with personal financial responsibility for the franchise's performance. This is a common practice in franchising, as it provides the franchisor with added security and recourse in case of default or breach of contract by the franchisee. By requiring guarantees from owners and their spouses, Mrcool aims to mitigate its risk and ensure commitment to the franchise.
Furthermore, these individuals must also agree in writing not to participate in any business that competes with Mrcool during the term of the Franchise Agreement and for 24 months after its expiration or termination within the designated territory and a 25-mile radius. They are also prohibited from participating in any competitive business within a 10-mile radius of any other Mrcool Center. This non-compete clause is designed to protect Mrcool's market share and confidential information.