Where is the 'Development Area Fee' defined within the Mrcool Franchise Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
ent schedule that must be strictly adhered to, with each Center within the Development Area being opened and operating utilizing the Marks and System pursuant to the terms and conditions set forth in a separate form of Franchisor's then current Franchise Agreement for MRCOOL Centers (each, a "Franchise Agreement"); and
WHEREAS, Franchisee agrees that adherence to the terms of this Agreement, each and every Center individual unit Franchise Agreement, Franchisor's Operations Manual, and Franchisor's System standards and specifications, are essential to the operation of all MRCOOL Centers and the System as a whole.
NOW THEREFORE, the parties, in consideration of the mutual undertakings and commitments of each party set forth herein, agree, as follows:
SECTION 1 DEFINITIONS
Supplementing the definitions contained in the Recitals, above, the following terms will have the meaning as defined below:
"Abandonment" refers to and means the conduct of the Franchisee, including acts of omission as well as commission, indicating the willingness, desire or intent of the Franchisee to discontinue the development and/or operation of the MRCOOL Centers in the Development Area in accordance with the terms of this Agreement.
- "Affiliates" means individually or collectively, any and all entities controlling, controlled by, or under common ownership with Franchisor.
- "Center" shall have the meaning set forth in the Recitals and shall refer to all Centers operating under the System and Marks, whether owned by us or any Affiliate, or licensed or franchised by us or any Affiliate.
- "Center Location(s)" refers to and means the fixed locations from which MRCOOL Centers are established, operated and managed.
- "Corporate Entity" refers to and means a corporation, limited liability company, partnership or other corporate legal entity that is not an individual person.
- "Cumulative Development Centers" shall, respectively, have the meaning defined and set forth in Section 4.4 of this Agreement.
- "Development Area" shall have the meaning defined and set forth in Section 2.1 of this Agreement.
- "Development Area Fee" shall have the meaning defined and set forth in Section 4.1 of this Agreement.
- "Development Center" shall have the meaning defined and set forth in Section 2.1 of this Agreement.
- "Development Center Initial Franchise Fee" shall have the meaning defined and set forth in Section 4.2 of this Agreement.
- "Development Information Sheet" refers to and means the Development Information Sheet attached to this Agreement as Schedule A. The Development Information Sheet is incorporated into this Agreement.
- "Development Period" shall, respectively, have the meaning defined and set forth in Section 4.4 of this Agreement.
- "Development Schedule" shall have the meaning defined and set forth in Section 4.4 of this Agreement.
- "Effective Date" shall be the date set forth, defined and referred to in the first paragraph of this Agreement.
- "First Development Center" refers to and means the Center to be developed by Franchisee as the first Development Center to be developed and operated by Franchisee within the Development Area.
- "Franchise Agreement" refers to and means Franchisor's individual unit MRCOOL Center Franchise Agreement as designated and determined by Franchisor from time to time.
- "Marks" means such service marks, trademarks, trade dress, trade names, logos, commercial symbols and all configurations and derivations thereof, as may presently exist, or which may be modified, changed, or acquired by Franchisor or Franchisor's affiliates, in connection with the operation of Centers.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the 'Development Area Fee' is defined in Section 4.1 of the agreement. Section 1 of the agreement also contains definitions, and it states that the 'Development Area Fee' has the meaning defined and set forth in Section 4.1 of the agreement. This fee is paid by the franchisee in exchange for the rights granted to them under the agreement. The specific amount of the Development Area Fee is detailed in the Development Information Sheet. This fee is non-refundable.
In practical terms, this means that a prospective Mrcool franchisee needs to refer to both Section 4.1 of the Franchise Agreement and the Development Information Sheet to understand the full details regarding the Development Area Fee. This includes the amount of the fee and when it is due.
It is important to note that the Development Area Fee is separate from the Development Center Initial Franchise Fee. The initial franchise fee for the first development center is $50,000, payable upon execution of the Franchise Agreement for the First Development Center. For each additional Development Center beyond the first, the Development Center Initial Franchise Fee is $0 (waived), provided the franchisee is not in default of the Multi-Unit Development Agreement or any other agreement with Mrcool.