What specific actions are required of Mrcool franchisees to maintain good standing under the Multi-Unit Development Agreement and ensure the continued waiver of the Development Center Initial Franchise Fee?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
| OTHER AUTHORIZED DEVELOPMENT CENTERS: Provided that Franchisee is not in default of the | |
|---|---|
| terms of this MRCOOL Multi-Unit Development Agreement (including but not limited to the Development | |
| Schedule set forth below) and that neither Franchisee nor Franchisee’s affiliates are in default of any Franchise | |
| Agreement or other agreement with Franchisor, the Development Center Initial Franchise Fee for each additional | |
| Development Center (over and above the First Development Center), is: $0 (Waived), payable at the time of | |
| signing the Franchise Agreement for each Development Center. |
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, multi-unit franchisees can have the Development Center Initial Franchise Fee waived for each additional center beyond the first, provided they remain in good standing. To maintain this good standing, franchisees must not be in default of the Multi-Unit Development Agreement, which includes adhering to the Development Schedule. Additionally, neither the franchisee nor their affiliates can be in default of any Franchise Agreement or other agreement with Mrcool. The initial franchise fee for the first development center is $50,000.
In practical terms, this means a Mrcool franchisee must diligently meet the milestones outlined in the Development Schedule, such as opening and operating the required number of Mrcool Centers within specified timeframes. Failure to meet these development obligations can result in the termination of the agreement by Mrcool, without opportunity to cure the default. This strict adherence to the schedule is considered a material aspect of the agreement, with time being of the essence.
Furthermore, franchisees must ensure compliance with all terms and conditions of their Franchise Agreements and any other agreements with Mrcool. This includes, but is not limited to, the timely payment of royalty fees and other obligations outlined in each respective Franchise Agreement. The Development Agreement does not reduce or mitigate these obligations, except for the initial franchise fee for subsequent Development Centers, which is waived as long as the franchisee remains in good standing.
Prospective Mrcool multi-unit franchisees should carefully review the Development Schedule and all associated agreements to fully understand their obligations and the potential consequences of non-compliance. Understanding these requirements is crucial for maintaining good standing and ensuring the continued waiver of the Development Center Initial Franchise Fee for each additional location.