Does the Mrcool FDD specify any deadlines related to signing the Franchise Agreement for each additional Development Center?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
For each MRCOOL Center owned, developed and opened for business by the Franchisee in the Development Area, Franchisee must execute Franchisor's then current standard Franchise Agreement. A then current standard Franchise Agreement must be executed by the Franchisee for each and every Development Center on or before the earlier of: (a) the date Franchisee (subject to Franchisor's approval of the Center Location) executes a lease for the Center Location for each respective Development Center; (b) the date Franchisee (subject to Franchisor's approval of the Center Location) enters into a purchase agreement for the real estate for the Center Location for each respective Development Center; or (c) six months prior to the date that each respective Development Center must be open and in operation pursuant to the Development Schedule.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, franchisees with multi-unit development agreements must adhere to specific timelines for opening new locations. Specifically, the franchisee must execute Mrcool's standard Franchise Agreement for each Development Center. This agreement must be signed on or before the earliest of three dates: when the franchisee executes a lease for the center location (subject to Mrcool's approval), when the franchisee enters a purchase agreement for the real estate (again, subject to Mrcool's approval), or six months before the Development Center is scheduled to open according to the Development Schedule.
This requirement ensures that Mrcool maintains control over the pace of expansion and that franchisees are committed to opening new locations in a timely manner. The Development Schedule, outlined in the Development Agreement, sets forth the specific periods within which each Development Center must be opened and operational. Failure to meet these deadlines can result in the termination of the Development Agreement and the loss of future development rights.
For a prospective Mrcool franchisee, this means careful planning and execution are crucial. Securing suitable locations, negotiating leases or purchase agreements, and completing the Franchise Agreement paperwork must all be done within the specified timeframes. The franchisee bears the responsibility of conducting thorough due diligence and ensuring the Development Schedule is reasonable and achievable. The FDD emphasizes that "time is of the essence" regarding these development obligations, highlighting the importance of strict adherence to the agreed-upon schedule.
Furthermore, the initial franchise fee for each additional Development Center is $0 (waived), but this is only applicable if the franchisee is not in default of the Multi-Unit Development Agreement, including the Development Schedule. This provides an incentive for franchisees to meet the deadlines and obligations outlined in the agreement. The franchisee should carefully review the Development Schedule and understand the implications of failing to meet the specified deadlines.