What is the minimum royalty per month for an Mrcool franchise during its first year of operation?

According to Mrcool's 2025 Franchise Disclosure Document, a franchisee is required to pay a minimum royalty fee each month. During the first year of operation, the minimum royalty fee is $1,000 per month. This minimum royalty increases in subsequent years, rising to $1,500 per month in the second year, $1,800 per month in the third year, and $2,160 per month from the fourth year onward.

This escalating minimum royalty structure means that Mrcool franchisees need to ensure their business generates sufficient revenue to cover this fixed cost, regardless of actual sales volume. Franchisees should factor these increasing royalty payments into their financial projections and business plans to ensure long-term profitability. Failing to meet these minimum royalty obligations could put a strain on the franchisee's finances and potentially lead to a breach of the franchise agreement.

It is important to note that Mrcool has the right to modify the minimum royalty in any Renewal Franchise Agreement based on their reasonable business judgment. However, the minimum royalty during any renewal term will not be less than the amount set forth for Year 4 and thereafter. This provides some predictability for franchisees as they consider renewing their agreements, but it also highlights the importance of understanding the terms of the renewal agreement and how the royalty structure may change.

Prospective Mrcool franchisees should carefully consider these minimum royalty obligations and how they align with their business goals and financial capabilities. Understanding the royalty structure and its potential impact on profitability is a critical aspect of evaluating the Mrcool franchise opportunity.