factual

What is the Mrcool franchisee's obligation regarding making unauthorized copies of documents containing Confidential Information?

Mrcool Franchise · 2025 FDD

Answer from 2025 FDD Document

6.C. RESTRICTIVE COVENANTS: CONFIDENTIAL INFORMATION

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 Mrcool's 2025 Franchise Disclosure Document, franchisees are prohibited from making unauthorized copies of documents containing Confidential Information, both during the term of the agreement and after its expiration or termination. This obligation extends not only to the franchisee but also to their Owners and Spouses, who must sign a Franchise Owner and Spouse Agreement and Guaranty. Additionally, it applies to the franchisee's directors, officers, employees, and agents if they have access to the Know-How and have signed a Confidentiality Agreement.

This restriction is part of a broader set of covenants designed to protect Mrcool's Know-How and Confidential Information. Franchisees must maintain the confidentiality of the Know-How and Confidential Information at all times and take reasonable steps to prevent unauthorized use or disclosure. They must also cease using the Know-How and Confidential Information immediately upon the expiration, termination, or transfer of the Franchise Agreement.

For a prospective Mrcool franchisee, this means understanding the scope of what constitutes Confidential Information and Know-How is crucial. They must implement measures to prevent unauthorized copying and disclosure within their organization. This includes ensuring that all relevant parties (owners, spouses, employees, etc.) are aware of and comply with these restrictions, with employees and others signing a Confidentiality Agreement.

The Confidentiality Agreement exhibited in the FDD is a sample and Mrcool recommends that franchisees have the agreement reviewed and approved by an independent local attorney before using it with an employee or contractor. Failure to comply with these covenants can result in legal action from Mrcool, including injunctive relief and potential monetary damages, highlighting the importance of strict adherence to these confidentiality obligations.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.