If the Mrcool franchisor appoints a manager for a franchisee's center, does this relieve the franchisee of their obligations under the agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
If, at any time, the Franchised Business is not being managed by a Managing Owner or Operating Manager who satisfactorily completed the Training Program, Franchisor is authorized, but is not required, to immediately appoint a manager to maintain the operations of the Franchised Business for and on behalf of Franchisee.
Franchisor's appointment of a manager of the Franchised Business does not relieve Franchisee of its obligations or constitute a waiver of Franchisor's right to terminate the Franchise pursuant to Article 16.
Franchisor is not liable for any debts, losses, costs or expenses incurred in the operations of the Franchised Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by the Franchised Business while it is managed by Franchisor's appointed manager.
Franchisor has the right to charge fees and expenses, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, for management services (the "Management Service Fees").
Any determination as to whether or not Franchisor may elect to provide management services, if any, and the extent of such services, and/or the discontinuation thereof, shall be exclusively determined by Franchisor in Franchisor's Reasonable Business Judgment.
The Management Service Fee shall be immediately payable upon invoice by us.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, if the franchisor appoints a manager to maintain the operations of a franchised business, this action does not relieve the franchisee of their obligations under the franchise agreement. Furthermore, it does not constitute a waiver of Mrcool's right to terminate the franchise agreement. This means that even if Mrcool steps in to manage the business, the franchisee remains responsible for fulfilling all contractual obligations and is still subject to potential termination for any breaches.
Mrcool will not be held liable for any debts, losses, costs, or expenses incurred during the period when the appointed manager is overseeing the operations. This includes any obligations to creditors for products, materials, supplies, or services purchased by the franchised business during this time. The franchisee remains ultimately responsible for all financial aspects of the business, even under external management.
Mrcool retains the right to charge fees and expenses for these management services, with the specific amounts to be determined by Mrcool in its reasonable business judgment. The determination of whether to provide management services, the extent of those services, and their discontinuation are all decisions made exclusively by Mrcool. The franchisee is obligated to pay these management service fees immediately upon receiving an invoice from Mrcool.