What is the radius around another Mrcool Center where franchisees are prohibited from participating in a competitive business after the agreement expires or terminates?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
You and, if you are a Corporate Entity, each of your members, shareholders and/or partners (collectively, "Owners"), must personally guarantee all of your obligations to us under the Franchise Agreement. Each Owner and the spouse of each Owner must personally guarantee your obligations to us under the Franchise Agreement. You and each Owner and spouse must also promise in writing that, among other things, during the term of the Franchise Agreement you will not participate in any business that in any way competes with the Franchised Business, and that for 24 months after the expiration of termination of the Franchise Agreement (with said period being tolled during any periods of non-compliance), neither you nor your Owners and their spouses will participate in any competitive business located within and/or servicing customers located within your Designated Territory and a 25 mile radius surrounding your Designated Territory. Further you will not participate in any competitive business located within and/or servicing customers located within a 10 mile radius of any other MRCOOL Center and/or the designated territory of any other MRCOOL Center. Your managers and all other employees and agents with access to our confidential information will be required by us to sign a confidentiality agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 42)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, franchisees and their owners/spouses are restricted from participating in any competitive business within a 10-mile radius of any other Mrcool Center or its designated territory for 24 months after the franchise agreement expires or terminates. This restriction applies to the franchisee, their owners, and their spouses.
This post-term non-compete agreement means that a former Mrcool franchisee cannot open or be involved with a competing business within that 10-mile radius. This measure is designed to protect Mrcool's market share and prevent franchisees from using the knowledge and experience gained during their franchise term to unfairly compete with existing Mrcool locations. The restriction extends not only to ownership but also to any role such as employee, officer, director, manager, consultant, or agent for a competing business.
The FDD also specifies that the non-compete period can be tolled (paused) during any periods of non-compliance, effectively extending the restriction if the franchisee violates the agreement. This provision ensures that Mrcool can enforce the non-compete obligations and prevent franchisees from circumventing the restrictions through temporary violations. Franchisees should be aware of these limitations and consider them carefully before signing the Franchise Agreement.
Prospective franchisees should carefully evaluate the designated territory and the proximity of other Mrcool Centers to understand the potential limitations on future business opportunities after the franchise term. It is also important to note that these restrictions are subject to state laws, which may impact their enforceability.