What happens if the Mrcool Franchise Agreement terminates for any reason?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
mitation as to any other Article or provision of this Agreement, upon expiration or termination of this Agreement for any reason, Franchisee shall immediately pay to Franchisor all sums and fees due from Franchisee to Franchisor under the terms of this Agreement including, but not limited to Royalty Fees and Advertising Contributions and all other sums and fees due from Franchisee to Franchisor and/or Franchisor affiliates and/or suppliers for products and services including, but not limited to, System Supplies.
17.B. CEASE OPERATIONS AND PROTECTION OF THE SYSTEM
Upon expiration, termination, or Transfer of this Agreement for any reason, Franchisee shall immediately:
- (1) Permanently cease to be a franchise owner of the Center that was the subject of this Agreement and cease to operate such Center under the System;
- (2) Refrain from directly or indirectly, holding oneself/itself out to any person or entity, or represent themselves/itself as a present or former MRCOOL franchisee;
- (3) Permanently cease to use, in any manner: (a) the System including, without limitation, the Confidential Information, the Licensed Marks, the Business Management System Data, and the Operations Manual; (b) any methods, procedures, or techniques associated with the System in which Franchisor possesses proprietary rights or that constitute Franchisor's trade secrets; (c) System Supplies, including communicating with or ordering products from Franchisor's designated suppliers and vendors of System Supplies; (d) the Approved Services and Products; and (e) any other advertising, marketing, media, and any other information, documents or things associated with Franchisor, the System, the Licensed Marks, MRCOOL Centers, the Franchised Business, and Franchisee's former MRCOOL Center, including, without limitation, any confidential, proprietary methods, procedures, descriptions of products, techniques, trade secrets, proprietary marks, distinctive forms, slogans, symbols, signs, stationary, advertising material, articles, logos, devices, items and all other things, tangible or intangible, associated with Franchisor, the System, the Licensed Marks, and MRCOOL Centers;
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, several actions must be taken upon the termination of the Franchise Agreement. The franchisee must immediately cease operating as a Mrcool franchise owner and discontinue using the Mrcool system. This includes refraining from representing themselves as a current or former franchisee. They must also stop using any aspect of the Mrcool system, including confidential information, licensed marks, the business management system, and the operations manual.
Furthermore, the franchisee is required to return the operations manual, confidential information (including business management system data and customer lists), and all other confidential materials and property owned by Mrcool. However, the franchisee can retain copies of the Franchise Agreement, correspondence with Mrcool (excluding confidential information), and other documents required by law.
These post-termination obligations are fairly standard in franchising to protect the brand and proprietary information. A prospective Mrcool franchisee should carefully review these requirements to understand their responsibilities should the agreement end, whether by expiration, termination, or transfer.