What is the purpose of Exhibit 3, the Site Selection Acknowledgment, in the Mrcool Franchise Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) If, as of the Effective Date or other appropriate periods after the Effective Date, Franchisee has not selected a proposed Center Location that is approved by Franchisor but, Franchisee has identified an area in which Franchisee may look to secure a Center location for the Franchised Business, Franchisor, in Franchisor's discretion and Reasonable Business Judgment, may enter into the Site Selection Acknowledgment attached to this Agreement as Exhibit 3.
If executed by Franchisor, within the Exhibit 3 Site Selection Acknowledgment, Franchisor shall designate a geographic area (the "Site Selection Area") within which Franchisor, during the Site Selection Period, shall not, on behalf of any third party, approve any new Center Location.
Franchisee agrees that the Site Selection Acknowledgment does not constitute Franchisor's approval of a proposed Center Location, does not constitute Franchisor's designation of Franchisee's Designated Territory, does not afford Franchisee any territorial rights in or to the Site Selection Area, and does not extend and/or modify any obligation on the part of Franchisee to timely secure an approved Center Location in accordance with the terms of this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, Exhibit 3, the Site Selection Acknowledgment, serves a specific purpose when a franchisee hasn't yet secured an approved location by the effective date of the Franchise Agreement. In such cases, Mrcool may, at its discretion, enter into this acknowledgment with the franchisee. This document allows Mrcool to designate a "Site Selection Area" where it will not approve any new Mrcool Center locations for other third parties during a specified "Site Selection Period."
However, the Site Selection Acknowledgment explicitly states that it does not constitute Mrcool's approval of a proposed location, nor does it designate the franchisee's exclusive territory. It also doesn't grant any territorial rights within the Site Selection Area to the franchisee. Furthermore, it doesn't change the franchisee's obligation to find and secure an approved location within the timeframe outlined in the Franchise Agreement.
In essence, this acknowledgment provides a limited period during which Mrcool will not approve competing locations in a defined area while the franchisee seeks a suitable site. It's a temporary measure to aid the franchisee in their search, but it doesn't guarantee any exclusive rights or alter the franchisee's responsibilities regarding site selection. The document clearly emphasizes that securing an approved location remains the franchisee's responsibility under the terms of the Franchise Agreement.