Does the Mrcool FDD specify any exceptions to the requirement that neither the franchisee nor their affiliates are in default for the waiver of the Development Center Initial Franchise Fee?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
opment Agreement – Schedule A** DEVELOPMENT INFORMATION SHEET
| A. List of State Administrators | G. List of Franchisees | |---|---| | B. List of Agents for Service of Process | H. List of Franchisees Who Have Left the System | | C. Operations Manual Table of Contents | I. State Specific Addenda | | D. Financial Statements | J. State Effective Dates | | E. Franchise Agreement | K. Receipts | | F. Multi-Unit Development Agreement | | [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
FIRST DEVELOPMENT CENTER: The Development Center Initial Franchise Fee for the First Development
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the Development Center Initial Franchise Fee is waived for additional centers beyond the first, provided certain conditions are met. Specifically, the franchisee must not be in default of the MRCOOL Multi-Unit Development Agreement, including adherence to the Development Schedule. Additionally, neither the franchisee nor their affiliates can be in default of any Franchise Agreement or other agreement with Mrcool.
This waiver of the Development Center Initial Franchise Fee can significantly reduce the financial burden for franchisees expanding their operations. However, it's crucial for franchisees to remain in good standing with Mrcool to qualify for this waiver. Defaulting on the Development Schedule or any agreement with Mrcool, or if any affiliate defaults, could result in the franchisee having to pay the Development Center Initial Franchise Fee for each additional center.
The Mrcool FDD does not specify any exceptions to this requirement. Therefore, it appears that strict adherence to all agreements and the absence of any defaults by the franchisee or their affiliates are necessary to obtain the waiver. This policy is fairly standard in franchising, as franchisors typically want to incentivize good performance and compliance with the franchise agreement.
Prospective Mrcool franchisees should carefully review all agreements and the Development Schedule to ensure they can meet the obligations. They should also ensure that their affiliates are in good standing with Mrcool to avoid any issues with the waiver of the Development Center Initial Franchise Fee. It would be prudent to seek clarification from Mrcool regarding what constitutes a 'default' and what specific actions could trigger the loss of the fee waiver.