What must a Mrcool franchisee do upon transferring the Franchise Agreement regarding Confidential Information?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that, at all times, both during the Term of this Agreement and, after its expiration or termination, Franchisee: (a) shall not use the Confidential Information in any business or capacity other than the MRCOOL Center operated by Franchisee; (b) shall maintain the confidentiality of the Confidential Information at all times; (c) shall not make unauthorized copies of documents containing any Confidential Information; (d) shall take such reasonable steps as Franchisor may ask of Franchisee from time to time to prevent unauthorized use or disclosure of the Confidential Information; and (e) shall stop using the Confidential Information immediately upon the expiration, termination or Transfer of this Agreement. Franchisee agrees that the foregoing covenants and obligations shall also apply to: (a) Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to the 2025 Mrcool Franchise Disclosure Document, upon the transfer of the Franchise Agreement, a franchisee must cease using Confidential Information immediately. This includes not using the Confidential Information in any business or capacity other than the Mrcool Center that they operated. The franchisee must also continue to maintain the confidentiality of the Confidential Information and not make unauthorized copies of documents containing such information.
Additionally, the franchisee must take reasonable steps to prevent unauthorized use or disclosure of the Confidential Information. This obligation extends not only to the franchisee but also to their Owners and Spouses, who must also adhere to these confidentiality requirements. Furthermore, these stipulations apply to the franchisee's directors, officers, employees, and agents if their access to the Know-How was necessary for the franchise's operations and they previously signed a Confidentiality Agreement.
In practical terms, this means that a transferring Mrcool franchisee cannot leverage any proprietary knowledge, customer lists, or operational methods learned during their time as a franchisee in any subsequent business venture. The restrictions are designed to protect Mrcool's competitive advantage and ensure that sensitive information does not fall into the hands of competitors. Franchisees should ensure that all relevant parties, including owners, spouses, employees, and agents, are fully aware of these obligations and have executed the necessary confidentiality agreements to avoid potential legal repercussions.