For how long after termination or expiration of the Mrcool franchise is the franchisee prohibited from involvement in a competing business?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferees continued use and occupancy of such location throughout the term of the Franchise Agreement; the assets of the Franchised Business must be transferred to the transferee; the transferee and the transferee's owners and managers, at the transferee's expense must complete our training programs; we waive our right of first refusal; and we approve of the transfer and transferee in writing and subject to our discretion; you pay the Transfer Fee (subject to applicable state laws). |
|---|---|---|---|
| n. | Franchisor's right of first refusal to acquire franchisee's business | 14.F. | We have the right to match any offer to purchase your Center or the Corporate Entity operating your Center. |
| o. | Franchisor's option to purchase | Not | Not applicable. |
| franchisee's business | applicable | ||
| p. | Death or disability of franchisee | 14.D. | If you are an individual, within 30 days of the |
| death or | |||
| permanent disability of Franchisee, your executor and/or | |||
| legal representative must appoint an Operating Manager | |||
| approved by us and within 60 | |||
| days of such appointment the | |||
| Operating Manager must complete, to our satisfaction, our | |||
| initial training program. Within 12 months of the date of | |||
| death or disability, the Franchise Agreement must be | |||
| transferred to a transferee approved by us and otherwise | |||
| transferred in accordance with the terms of the Franchise | |||
| Agreement. If the franchisee is a Corporate Entity, within | |||
| 30 | |||
| days of the death or permanent disability of your | |||
| Managing Owner, if there are other Owners, must appoint a | |||
| replacement Operating Manager approved by us and within | |||
| 60 days of such appointment the replacement Operating | |||
| Manager must complete, to our satisfaction, our initial | |||
| training program. | |||
| q. | Non-competition covenants during the term of the franchise | 6 | No involvement in any competitive business and must comply with confidentiality, non-disclosure and non solicitation covenants. |
| r. | Non-competition covenants after the franchise is terminated or expires | 6, 17.E. | No involvement, ownership or interest whatsoever for 24 months in any competing business in: your Designated Territory; a 25-mile radius of your Designated Territory; a 10-mile radius of the Designated Territory of any other Center; and you must comply with confidentiality, non disclosure and non-solicitation covenants. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, a franchisee is subject to a non-competition covenant for 24 months after the franchise is terminated or expires. During this period, the franchisee is prohibited from any involvement, ownership, or interest in a competing business.
The restriction applies within the franchisee's Designated Territory, a 25-mile radius of their Designated Territory, and a 10-mile radius of any other Mrcool Center's Designated Territory. In addition to these geographical restrictions, the franchisee must also adhere to confidentiality, non-disclosure, and non-solicitation covenants.
This means that upon termination or expiration of the franchise agreement, a former Mrcool franchisee cannot immediately start or join a competing business within the specified areas. This restriction is designed to protect Mrcool's market share and confidential information. Franchisees should carefully consider these post-term restrictions, as they could impact their future business opportunities after leaving the Mrcool system.