What further agreements might Mrcool require the transferee to execute?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) The transferee shall be bound by all terms and conditions of this Agreement, and each owner of the transferee and their respective spouses shall personally execute the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Each owner of the transferee shall also be required to execute such further agreements designated by Franchisor whereby the proposed transferee assumes each and every obligation and responsibility of Franchisee as set forth in this Agreement;
(7) If the proposed Transfer includes or entails the Transfer of this Agreement, substantially all of the assets of the Franchised Business, a controlling interest in Franchisee, or is one of a series of Transfers which in the aggregate Transfers substantially all of the assets of the Franchised Business or a controlling interest in Franchisee, then, at the election of Franchisor and upon notice from Franchisor to Franchisee, the transferee may be required to execute (and/or, upon Franchisee's request, shall cause all interested parties to execute) for a term ending on the expiration date of the original Term of this Agreement, the then current standard form Franchise Agreement offered to new franchisees of MRCOOL Centers and any other agreements as Franchisor requires.
(13) Transferee's employees, directors, officers, independent contractors, and agents who will have access to Confidential Information shall execute the Confidentiality Agreement attached hereto as Exhibit 2;
(14) Franchisee entering into an agreement with Franchisor agreeing to subordinate any obligations of transferee to make installment payments of the purchase price to Franchisee to the transferee's obligations to Franchisor, including, without limitation, transferee's obligations with respect to Royalty Fees and Advertising Contributions;
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, a transferee—the party acquiring the franchise—may be required to execute several agreements. Each owner of the transferee, along with their spouses, must execute the Franchise Owner and Spouse Agreement and Guaranty, as outlined in Exhibit 1 of the agreement. Additionally, Mrcool may require the transferee to sign further agreements that ensure they assume all obligations and responsibilities of the original franchisee, as detailed in the existing agreement.
In specific transfer scenarios, such as when the transfer involves the franchise agreement itself, substantially all of the franchised business's assets, or a controlling interest in the franchisee, Mrcool has the option to require the transferee to execute the then-current standard form Franchise Agreement for new franchisees. This new agreement would be for a term ending on the original agreement's expiration date and could include other agreements Mrcool deems necessary. While the terms of these new agreements may differ from the original, they must maintain the same Royalty Fee, Advertising Contributions, and other financial obligations.
Furthermore, the transferee's employees, directors, officers, independent contractors, and agents who will have access to confidential information must execute the Confidentiality Agreement, which is included as Exhibit 2. The franchisee may also need to enter into an agreement with Mrcool to subordinate any obligations of the transferee to make installment payments to the franchisee, ensuring that Mrcool's financial interests, such as Royalty Fees and Advertising Contributions, take precedence.