What is the implication of a default by the franchisee's affiliates on any agreement with the franchisor regarding the Mrcool Development Center Initial Franchise Fee waiver?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
opment Agreement – Schedule A** DEVELOPMENT INFORMATION SHEET
| A. List of State Administrators | G. List of Franchisees | |---|---| | B. List of Agents for Service of Process | H. List of Franchisees Who Have Left the System | | C. Operations Manual Table of Contents | I. State Specific Addenda | | D. Financial Statements | J. State Effective Dates | | E. Franchise Agreement | K. Receipts | | F. Multi-Unit Development Agreement | | [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
FIRST DEVELOPMENT CENTER: The Development Center Initial Franchise Fee for the First Development
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, a franchisee may have the Development Center Initial Franchise Fee waived for additional Development Centers beyond the first one. The standard Development Center Initial Franchise Fee for the First Development Center is $50,000. However, this waiver is conditional.
Specifically, the waiver is contingent upon the franchisee remaining in good standing under the Multi-Unit Development Agreement, including adhering to the Development Schedule. Critically, the waiver is also contingent on the franchisee's affiliates remaining in good standing. If the franchisee or any of its affiliates defaults on any Franchise Agreement or any other agreement with Mrcool, the waiver is voided.
This means that if a franchisee's affiliate, such as a business partner or related company, breaches any agreement with Mrcool, the franchisee will lose the benefit of the waived Development Center Initial Franchise Fee for additional development centers. The franchisee would then be responsible for paying the standard Development Center Initial Franchise Fee for each additional Development Center.