What is the Mrcool franchisee's responsibility regarding their immediate family member's access to Know-How?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
know if Franchisee permitted and/or provided an immediate family member with access to the Confidential Information and that, therefore, Franchisee agrees that Franchisee will be presumed to have violated the terms of this Agreement and, in particular, the restrictive covenants and obligations set forth in this Article 6 if any member of Franchisee's immediate family or the immediate family of an Owner: (a) engages in any Prohibited Activities during any period of time during which Franchisee is prohibited from engaging in the Prohibited Activities; and/or (b) uses or discloses the Confidential Information and/or Know-How. Franchisee may rebut the foregoing presumption by providing evidence conclusively demonstrating that neither Franchisee nor Franchisee's Owners disclosed the Confidential Information and, did not permit disclosure of the Confidential Information to the family member of Franchisee or Franchisee's Owner. Franchisee agrees that the foregoing covenants, obligations, representations and burden of proof shall also apply to Franchisee's Owners and Spouses and, that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, franchisees have specific responsibilities regarding their immediate family's access to confidential information and Know-How. Mrcool defines "Immediate Family" as the spouse and any member of the household, including children. Franchisees must prevent unauthorized use or disclosure of Know-How, which includes trade secrets and proprietary information related to the operation of a Mrcool Center. This obligation extends to the franchisee's owners and spouses, who must sign a Franchise Owner and Spouse Agreement and Guaranty.
The agreement states that if a franchisee permits an immediate family member to access Confidential Information and that family member engages in prohibited activities or uses/discloses Confidential Information or Know-How, the franchisee is presumed to have violated the agreement's restrictive covenants. However, the franchisee can rebut this presumption by providing evidence that neither the franchisee nor the franchisee's owners disclosed or permitted the disclosure of Confidential Information to the family member.
This requirement places a significant responsibility on Mrcool franchisees to actively safeguard Confidential Information and Know-How, not only from their own use but also from potential misuse by family members. Franchisees must take proactive steps to ensure family members do not gain unauthorized access to sensitive business information, and be prepared to demonstrate that they have taken such measures if a breach occurs. This is stricter than many franchise systems, which may only require a general duty of confidentiality without specific stipulations regarding family members.