What is the significance of the 'Recitals' section in the Mrcool Franchise Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
RECITALS
WHEREAS, Franchisor has developed a distinctive and proprietary system (the "System") for the establishment, development and operation of a Center, a warehouse distribution center that distributes "MRCOOL" branded HVAC products, provides HVAC installation services, HVAC equipment servicing, and other products and services (each, a "Franchised Business" or "Center");
WHEREAS, the System and, therefore, each Center is identified by the Marks (defined below) and distinctive trade dress, service offerings, business formats, equipment, products, supplies, operating procedures, programs, methods, procedures, and marketing and advertising standards, all of which are part of the System and all of which Franchisor may modify from time to time;
WHEREAS, simultaneous or prior to the execution of this Agreement, Franchisor and Franchisee have entered into a Center Franchise Agreement for Franchisee's development and operation of a Center (the "First Development Center") to be located within a territory located within the Development Area (defined below);
WHEREAS, Franchisee has requested the right to develop and operate multiple Centers (each a "Development Center") to be located with a defined geographical area (the "Development Area") in accordance with a development schedule that must be strictly adhered to, with each Center within the Development Area being opened and operating utilizing the Marks and System pursuant to the terms and conditions set forth in a separate form of Franchisor's then current Franchise Agreement for MRCOOL Centers (each, a "Franchise Agreement"); and
WHEREAS, Franchisee agrees that adherence to the terms of this Agreement, each and every Center individual unit Franchise Agreement, Franchisor's Operations Manual, and Franchisor's System standards and specifications, are essential to the operation of all MRCOOL Centers and the System as a whole.
NOW THEREFORE, the parties, in consideration of the mutual undertakings and commitments of each party set forth herein, agree, as follows:
SECTION 1 DEFINITIONS
Supplementing the definitions contained in the Recitals, above, the following terms will have the meaning as defined below:
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to the 2025 Mrcool Franchise Disclosure Document, the 'Recitals' section of the franchise agreement is significant because it lays the foundation and context for the agreement. It outlines the background, purpose, and intent of the agreement between Mrcool and the franchisee. The recitals establish Mrcool's proprietary system for operating Centers, which include warehouse distribution of Mrcool-branded HVAC products, installation, and servicing. It also emphasizes that each Center is identified by Mrcool's trademarks, trade dress, service offerings, and operating procedures.
The recitals also state that the franchisee has entered into a separate Center Franchise Agreement for their first Mrcool Development Center within a specific Development Area. It acknowledges the franchisee's desire to develop and operate multiple Centers within that area, adhering to a development schedule. The recitals stress the importance of following the terms of the Development Agreement, individual Franchise Agreements, the Operations Manual, and Mrcool's system standards.
Furthermore, the 2025 FDD states that the definitions contained in the Recitals are supplemented in Section 1 of the agreement. Certain terms, such as "Center" and "MRCOOL Centers" derive their meaning from the Recitals section. The franchisee also agrees that the recitals and representations are true and accurate and constitute a material part of the agreement, incorporating them into the main body of the agreement. This incorporation reinforces the importance of the Recitals as a foundational element of the Mrcool franchise agreement.