Does the Mrcool Franchise Agreement require the franchisee to pay fees?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
manager of the Franchised Business does not relieve Franchisee of its obligations or constitute a waiver of Franchisor's right to terminate the Franchise pursuant to Article 16. Franchisor is not liable for any debts, losses, costs or expenses incurred in the operations of the Franchised Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by the Franchised Business while it is managed by Franchisor's appointed manager. Franchisor has the right to charge fees and expenses, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, for management services (the "Management Service Fees"). Any determination as to whether or not Franchisor may elect to provide management services, if any, and the extent of such services, and/or the discontinuation thereof, shall be exclusively determined by Franchisor in Franchisor's Reasonable Business Judgment. The Management Service Fee shall be immediately payable upon invoice by us.
- (4) Franchisee will at all times maintain sufficient working capital to fulfill its obligations under this Agreement.
7.K. REMEDIES FOR NONCOMPLIANCE WITH OPERATIONAL STANDARDS
In addition to all other rights afforded to Franchisor under this Agreement, in connection with any, each, and every violation of any term, provision, and/or operational requirement as set forth in this Article 7 (an "Operations Violation"), within 14 days of Franchisor's invoice, Franchisee shall pay to Franchisor an
operations non-compliance fee (the "Operations Non-Compliance Fee") in the amount of: (a) $1,000 for each and every instance/event related to an Operations Violation involving the sale of services and/or products that are not Approved Services and Products; (b) $1,000 for each and every instance/event related to an Operations Violation involving the failure to exclusively use System Supplies, and/or Franchisor designated suppliers; and (c) $450 for all other Operations Violation. Additionally, in each of the foregoing instances, within 14 days of Franchisor's invoice, Franchisee shall pay to Franchisor all costs and expenses incurred by Franchisor in connection with any inspections, audits, and/or re-inspections directed and/or undertaken by Franchisor for the purpose, as determined by Franchisor in Franchisor's Reasonable Business Judgment, of determining whether or not Franchisee's Operations Violation has been cured in accordance with Franchisor's standards and specifications. The foregoing does not constitute Franchisor's consent to and/or acquiescence to Operations Violations. Nothing contained in this Article 7.K.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the franchisee is required to pay several fees. Specifically, if the franchisee decides to transfer the franchise to a new owner, the franchisee must pay Mrcool a Transfer Fee. Additionally, if Mrcool appoints a manager to oversee the operations of the Franchised Business on behalf of the franchisee, Mrcool has the right to charge the franchisee Management Service Fees.
Furthermore, Mrcool franchisees are required to participate in utilizing a Contact Center, and they must pay all costs and expenses associated with the Contact Center Services. The fees for these services are determined by Mrcool. Franchisees are also obligated to pay royalty and other fees as outlined in their respective Franchise Agreements.
Finally, franchisees may also incur attorney fees and expenses if an arbitrator or court finds them in breach of the Franchise Agreement. These fees and expenses can include arbitration fees, arbitrator fees, deposition expenses, expert witness fees, and filing fees. Therefore, it is important for prospective franchisees to carefully review the Franchise Agreement and related documents to fully understand all the fees they will be required to pay to Mrcool.