Does Section 7.16 of the Multi-Unit Development Agreement apply to Mrcool franchises in Washington State?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
WASHINGTON STATE FRANCHISE AGREEMENT AMENDMENT, MULTI-UNIT DEVELOPMENT AGREEMENT, AND OWNER AND SPOUSE AGREEMENT AND GUARANTEE
Amendments to the MRCOOL Franchise Agreement
In recognition of the Washington State Franchise Investment Protection Act, Chapter 19.100 RCW, the parties to the attached MRCOOL Franchising, LLC Franchise Agreement (the "Franchise Agreement") agree as follows:
In any mediation or arbitration involving a franchise purchased in Washington, the mediation or arbitration site shall be either in the State of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation or as determined by the arbitrator or mediator.
In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.
A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel.
Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may not be enforceable.
Transfer fees are collectable to the extent to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
Chapter 49.62 RCW limits the use of non-competition agreements and may supersede the Franchise Agreement's non-competition provisions.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
The 2025 Mrcool Franchise Disclosure Document includes a Washington FDD Amendment that addresses specific legal considerations for franchisees in Washington State. However, it does not explicitly mention Section 7.16 of the Multi-Unit Development Agreement. Instead, the amendment focuses on broader legal protections afforded to franchisees under the Washington Franchise Investment Protection Act, Chapter 19.100 RCW. These protections include stipulations regarding mediation or arbitration locations, conflict of laws, waivers of rights, transfer fees, and the enforceability of non-competition agreements.
Because the amendment addresses the Washington Franchise Investment Protection Act generally, prospective Mrcool franchisees in Washington should be aware of how these stipulations might affect their rights and obligations under both the Franchise Agreement and any Multi-Unit Development Agreement they may enter into. For example, the amendment clarifies that a release or waiver of rights executed by a franchisee does not include rights under the Washington Franchise Investment Protection Act unless it is part of a negotiated settlement with independent counsel after the agreement is in effect.
Since the excerpt does not specifically address Section 7.16 of the Multi-Unit Development Agreement, it remains unclear whether this section is directly affected by the Washington FDD Amendment. A prospective franchisee should clarify with Mrcool's legal team whether Section 7.16 is impacted or superseded by any provisions of Washington law or the state-specific amendment.