Is the initial franchise fee for a Mrcool franchise refundable?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 1: Initial Franchise Fee – The Initial Franchise Fee for a single franchise under a Franchise Agreement is $50,000. All initial franchise fees are non-refundable.
ARTICLE 5 FEES
5.A. INITIAL FRANCHISE FEE
Upon execution of this Agreement Franchisee shall pay to Franchisor a non-recurring initial franchisee fee (the "Initial Franchise Fee") of $50,000 for the Designated Territory encompassing an area containing 2,000,000 households ("Base Territory"). If Franchisee's Base Territory is supplemented with additional households, the Initial Franchise Fee shall be increased $0.05 for each additional household above the Base Territory and shall be the amount set forth in Schedule 1 of this Agreement. The Initial Franchise Fee is fully earned by Franchisor upon execution of this Agreement and is not refundable.
Amendments to the MRCOOL Franchise Disclosure Document
- Item 5, "Initial fees", Item 5 is supplemented by the addition of the following:
Refund and cancellation provisions will be inapplicable to franchises operating under North Dakota Law, North Dakota Century Code Annotated Chapter 51-19, Sections 51-19-01 through 51-19-17. If franchisor elects to cancel this Franchise Agreement, franchisor will be entitled to a reasonable fee for its evaluation of you and related preparatory work performed and expenses actually incurred.
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2025 FDD)
According to the 2025 Mrcool Franchise Disclosure Document, the initial franchise fee is generally not refundable. The standard initial franchise fee for a single franchise is $50,000. This fee grants the franchisee the right to operate within a designated territory. Mrcool earns this fee fully upon payment.
However, there is an exception for franchises operating under North Dakota law. In North Dakota, refund and cancellation provisions may apply, potentially altering the non-refundable nature of the initial fee. If Mrcool cancels a Franchise Agreement in North Dakota, they may be entitled to a reasonable fee to cover evaluation and preparatory work, as well as expenses incurred.
Prospective franchisees should carefully consider the non-refundable nature of the initial franchise fee, as it represents a significant upfront investment. Franchisees in North Dakota should be aware of the specific protections afforded to them under North Dakota law, which may provide some recourse in the event of cancellation or termination.