Does Mrcool provide its franchisees with any material benefits based on a franchisee's purchase of particular products or services or use of particular suppliers?

According to Mrcool's 2025 Franchise Disclosure Document, franchisees will not receive any material benefits for using Mrcool's designated or approved suppliers. However, Mrcool and its affiliates may receive rebates, payments, and other material benefits from suppliers based on franchisee purchases, and Mrcool reserves the right to institute and expand rebate programs in the future. As of the issuance date of the 2025 Disclosure Document, Mrcool has not received revenue from suppliers from franchisee purchases of source-restricted products or services. During the fiscal year ended December 31, 2024, Mrcool did not earn any revenue from approved suppliers based on franchisees' purchases.

Mrcool does require franchisees to purchase or lease certain source-restricted goods and services for the development and operation of their centers. These are goods and services that must meet Mrcool's specifications and/or be purchased from an approved or designated supplier, which may include Mrcool or its affiliates. Mrcool may designate itself, its parent, and its affiliates as exclusive suppliers of source-restricted goods and services, irrespective of competing suppliers. During the fiscal year ending December 31, 2024, Mrcool earned revenues of $850,684 from franchisee purchases, which constituted 67.30% of its total revenues of $1,263,312 in 2024.

Prospective franchisees should note that Mrcool estimates that purchases from approved suppliers, including exclusive suppliers, will represent approximately 85% of the total purchases and leases in establishing the franchised business and approximately 25% of the ongoing operating expenses. Franchisees are required to purchase or lease specific source-restricted goods and services, including system supplies, branded furniture and fixtures, signage, a business management system with at least five computers, credit card processing services, online ordering systems, and branded items and marketing materials. Mrcool may also require franchisees to exclusively use their designated supplier for social and digital media marketing services and platforms at the franchisee's cost.

If a franchisee wishes to use a non-approved supplier, they must submit a written request for approval, along with any additional information, samples, and testing data requested by Mrcool. Mrcool may charge a fee to cover the costs of reviewing and evaluating the alternate supplier. Approval is not guaranteed and is subject to Mrcool's discretion, based on factors such as the supplier's ability to meet Mrcool's standards, quality control, and whether the approval will advance the overall interests of the Mrcool system. Mrcool can revoke approval of a previously approved supplier if their standards fall below designated standards.