Does the Mrcool FDD specify how the Development Schedule is determined or modified in the Multi-Unit Development Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
tation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to
control the operations or affairs of Franchisee; and/or (e) the legal and/or equitable transfer and/or sale of an Owners interests and/or voting rights in Franchisee.
SECTION 2 DEVELOPMENT RIGHTS
2.1 DEVELOPMENT GRANT AND DEVELOPMENT OBLIGATIONS
Franchisor grants to Franchisee the right, and Franchisee accepts the right and undertakes the obligation to develop MRCOOL Centers, each to be developed, opened and operated by Franchisee within the Development Area (each, a "Development Center"), provided that Franchisee develops, opens and operates such Development Centers in strict accordance with the Development Schedule, and, in accordance with the terms and provisions of each respective Franchise Agreement.
The aggregate number of Development Centers (including the First Development Center) (collectively, referred to as the "Total Development Centers") that are authorized by this Agreement and required for development, subject to the terms of this Agreement and each respective Franchise Agreement, is set forth and defined in the Development Information Sheet.
The Development Area is and shall constitute the geographic area set forth and identified in the Development Information Sheet.
The Development Information Sheet is attached as Schedule A to this Agreement and is incorporated into and made a part of this Agreement. To be effective the Development Information Sheet must be completed and signed by Franchisor.
Franchisee agrees that Franchisee must: (a) open and commence the operations of each new Development Center in accordance with the Development Schedule for each respective Development Period, as set forth in this Agreement; and (b) maintain in operation the minimum cumulative number of Development Centers in accordance with the Development Schedule for each respective Development Period.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the Development Schedule within the Multi-Unit Development Agreement is initially determined through the Development Information Sheet, which is attached as Schedule A to the agreement. This sheet defines the total number of Mrcool Centers authorized for development and the specific geographic area covered. The franchisee is obligated to open and operate new Development Centers in strict accordance with this schedule, with "time being of the essence."
The FDD emphasizes the franchisee's responsibility to conduct their own due diligence and analysis to ensure the Development Schedule is reasonable and viable. By signing the agreement, the franchisee acknowledges that failure to meet the milestones outlined in the Development Schedule constitutes a material breach of the agreement. This highlights the importance of carefully reviewing and understanding the Development Schedule before entering into the Multi-Unit Development Agreement with Mrcool.
While the FDD specifies that the Development Schedule is defined in the Development Information Sheet, it does not explicitly detail the process for modifying the schedule after the agreement is signed. However, the FDD does state that the franchisee must open and commence operations of each new Development Center in accordance with the Development Schedule for each respective Development Period. A prospective franchisee should inquire with Mrcool about the conditions under which the Development Schedule can be modified and what recourse is available if unforeseen circumstances prevent adherence to the original schedule.