What geographic area is covered by the non-competition covenant after termination or expiration of a Mrcool franchise?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferees continued use and occupancy of such location throughout the term of the Franchise Agreement; the assets of the Franchised Business must be transferred to the transferee; the transferee and the transferee's owners and managers, at the transferee's expense must complete our training programs; we waive our right of first refusal; and we approve of the transfer and transferee in writing and subject to our discretion; you pay the Transfer Fee (subject to applicable state laws). |
|---|---|---|---|
| n. | Franchisor's right of first refusal to acquire franchisee's business | 14.F. | We have the right to match any offer to purchase your Center or the Corporate Entity operating your Center. |
| o. | Franchisor's option to purchase | Not | Not applicable. |
| franchisee's business | applicable | ||
| p. | Death or disability of franchisee | 14.D. | If you are an individual, within 30 days of the |
| death or | |||
| permanent disability of Franchisee, your executor and/or | |||
| legal representative must appoint an Operating Manager | |||
| approved by us and within 60 | |||
| days of such appointment the | |||
| Operating Manager must complete, to our satisfaction, our | |||
| initial training program. Within 12 months of the date of | |||
| death or disability, the Franchise Agreement must be | |||
| transferred to a transferee approved by us and otherwise | |||
| transferred in accordance with the terms of the Franchise | |||
| Agreement. If the franchisee is a Corporate Entity, within | |||
| 30 | |||
| days of the death or permanent disability of your | |||
| Managing Owner, if there are other Owners, must appoint a | |||
| replacement Operating Manager approved by us and within | |||
| 60 days of such appointment the replacement Operating | |||
| Manager must complete, to our satisfaction, our initial | |||
| training program. | |||
| q. | Non-competition covenants during the term of the franchise | 6 | No involvement in any competitive business and must comply with confidentiality, non-disclosure and non solicitation covenants. |
| r. | Non-competition covenants after the franchise is terminated or expires | 6, 17.E. | No involvement, ownership or interest whatsoever for 24 months in any competing business in: your Designated Territory; a 25-mile radius of your Designated Territory; a 10-mile radius of the Designated Territory of any other Center; and you must comply with confidentiality, non disclosure and non-solicitation covenants.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, if the franchise is terminated or expires, the franchisee is subject to a non-competition covenant. This covenant restricts the franchisee from any involvement, ownership, or interest in a competing business for 24 months.
The geographic scope of this restriction includes three specific areas. First, the franchisee's Designated Territory is included. Second, a 25-mile radius extending from the franchisee's Designated Territory is included. Third, a 10-mile radius around the Designated Territory of any other Mrcool Center is included.
In addition to these geographic restrictions, the franchisee must also adhere to confidentiality, non-disclosure, and non-solicitation covenants. These covenants are designed to protect Mrcool's proprietary information and business relationships. These restrictions do not apply to Multi-Unit Development Agreements, but each Mrcool Center developed under such an agreement will be subject to the non-competition terms in its respective Franchise Agreement.