What happens if a Mrcool franchisee doesn't comply with the requirements for proposing a new supplier?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
ch modification is in writing and signed by Franchisor) by limiting the scope of the Prohibited Activities, narrowing the definition of a Competitive Business, shortening the duration of the Post-Term Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon Franchisee under this Article 6 to ensure that the terms and covenants are enforceable under applicable law.
6.H. BREACH OF RESTRICTIVE COVENANTS AND OBLIGATIONS
Franchisee agrees that Franchisee's failure and/or Franchisee's Owner(s) failure to comply with the restrictive covenants and obligations set forth in this Article 6 will cause irreparable harm to Franchisor and/or other MRCOOL Center franchisees for which there is no adequate remedy at law. Franchisee agrees that any violation of these Article 6 covenants and obligations by either Franchisee and/or any Owner(s) will entitle Franchisor to injunctive relief. Franchisee agrees that Franchisor may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of Franchisee, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon a hearing duly held (all claims for damages by reason of the wrongful issuance of any such in
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
Based on the 2025 Mrcool Franchise Disclosure Document, if a franchisee fails to comply with the restrictive covenants and obligations, including those related to suppliers, it will cause irreparable harm to Mrcool and other franchisees. Mrcool can seek injunctive relief against the franchisee. This means Mrcool can go to court to get an order forcing the franchisee to comply with the agreement.
The FDD states that Mrcool can apply for injunctive relief without needing to post a bond, although if a bond is required by the court, the amount will not exceed $1,000. The franchisee's sole remedy if an injunction is issued is to seek its dissolution at a hearing. The franchisee waives all claims for damages resulting from the injunction's issuance.
These remedies are not exclusive and can be combined with others available under the agreement, at law, or in equity. This includes specific performance (forcing the franchisee to fulfill the agreement) and recovery of monetary damages. This indicates that Mrcool has several options for recourse if a franchisee violates the supplier requirements, ranging from legal orders to financial penalties.