Does the Mrcool franchise agreement require franchisees to assign rights to improvements they develop?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
6.I. OWNERSHIP OF INNOVATIONS, IMPROVEMENTS, AND INFORMATION
Franchisee agrees that with regard to the Franchised Business all customer lists and their contents and information represent Confidential Information and constitute an asset of Franchisor whether or not such information was supplied by Franchisor. During the Term of this Agreement and in connection with the development, establishment, marketing, promotion and operation of the Franchised Business, Franchisee shall disclose to Franchisor all of Franchisee's ideas, concepts, methods and products conceived or developed by Franchisee and Franchisee's affiliates, Owners, agents, and employees relating to the development and operation of MRCOOL Centers. Franchisee hereby assigns to Franchisor and Franchisee agrees to procure from Franchisee's Owners, affiliates and employees assignment of any such ideas,
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the franchise agreement requires franchisees to disclose and assign rights to any innovations, improvements, and information developed related to the franchised business. Specifically, Mrcool franchisees must disclose all ideas, concepts, methods, and products conceived or developed by them, their owners, affiliates, agents, and employees relating to the development and operation of Mrcool Centers.
This means that any advancements or new approaches a franchisee creates for the Mrcool business, even if they come from the franchisee's own team, must be revealed to Mrcool. Furthermore, the franchisee must transfer the ownership of these innovations to Mrcool. This includes obtaining agreements from the franchisee's owners, affiliates, and employees to assign these ideas as well.
This clause ensures that Mrcool maintains control over any improvements to the franchise system. While franchisees may be motivated to innovate, they will not own the rights to their creations. This is a fairly common practice in franchising, allowing the franchisor to standardize and implement successful innovations across the entire system. However, it is important for prospective franchisees to understand that they will not be able to independently profit from any improvements they develop for the Mrcool business.
In addition to innovations and improvements, the Mrcool franchise agreement also specifies that all customer lists and their contents are considered Confidential Information and an asset of Mrcool, regardless of whether the information was initially provided by Mrcool. This reinforces Mrcool's ownership of customer data and restricts franchisees from using this information for any purpose outside of the franchise agreement.