What specific brand protection restrictions are imposed on the franchisee by the Mrcool agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
and (b) Franchisee's directors, officers, employees and agents where disclosure of the Confidential Information was necessary for the operations of the Franchised Business and where such director, officer, employee and/or agent previously executed and timely delivered to Franchisor the Confidentiality Agreement in the form attached as Exhibit 2.
6.D. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND IN-TERM NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Term of this Agreement, Franchisee shall not engage in the following activities (the "Prohibited Activities"): (a) owning and/or having any legal or equitable interest whether, as an individual proprietor, owner, partner, member or shareholder of a Corporate Entity, or, in any similar capacity, in a Competitive Business other than, owning an interest of 3% or less in a publicly traded company that is a Competitive Business; (b) operating, managing, funding and/or performing services whether, as an employee, officer, director, manager, consultant, representative, agent, and/or creditor or, in any similar capacity, for or benefitting a Competitive Business; (c) diverting or attempting to divert any business or customers from Franchisor or, one of Franchisor's affiliates or franchisees; (d) inducing any customer or client of Franchisor, Franchisor's affiliates, franchisees of the System, or, of Franchisee, to any other person or business that is not a MRCOOL Center; and/or (e) engaging in any actions, inactions, and/or activities in violation of Articles 6.B. and/or 6.C. of this Agreement (all, individually and, collectively, referred to as the "Prohibited Activities"). Franchisee agrees that if Franchisee were to engage in the Prohibited Activities that such actions would be unfair, would constitute unfair competition and, would cause harm to Franchisor, the System and other MRCOOL Center franchisees. Franchisee agrees that the foregoing covenants and obligations shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
6.E. RESTRICTIVE COVENANTS: UNFAIR COMPETITION AND POST-TERMINATION NON-COMPETITION OBLIGATIONS
Franchisee agrees that during the Post-Term Restricted Period, Franchisee shall not engage in any Prohibited Activities provided, however, that the Prohibited Activities relating to Franchisee's having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within a Restricted Territory. If Franchisee is engaged in any Prohibited Activities during the Post-Term Restricted Period, Franchisee agrees that Franchisee's Post-Term Restricted Period will be extended by the period of time during which Franchisee was engaging in the Prohibited Activity and, any such extension of time will not be construed as a waiver of Franchisee's breach or otherwise impair any of Franchisor's rights or remedies relating to Franchisee's breach. Franchisee agrees that the foregoing covenants and restrictions shall also apply to Franchisee's Owners and Spouses and that Franchisee's Owners and Spouses shall each execute and deliver to Franchisor the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1. Franchisee agrees that the covenants and restrictions set forth in this Article 6.E. and, otherwise in this Article 6, are fair and reasonable and, that if Franchisee engaged in any Prohibited Activity that such actions would constitute acts of unfair competition, causing irreparable harm to Franchisor and the System.
6.F. IMMEDIATE FAMILY MEMBERS
Franchisee agrees that should Franchisee circumvent the restrictive covenants and obligations of this Article 6 by disclosing Confidential Information to an Immediate Family Member that Franchisor and, the System, will be irreparably harmed. Franchisee agrees that if Franchisee or, one of Franchisee's Owners, discloses Confidential Information to an immediate family member and, the immediate family member of Franchisee or an Owner, uses the Confidential Information to engage in activities that, for Franchisee, qualify as Prohibited Activities, that Franchisor and the System will be irreparably harmed.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to the 2025 Mrcool Franchise Disclosure Document, Mrcool franchisees face several restrictions to protect the brand. During the term of the agreement, franchisees are prohibited from engaging in activities such as owning or having a legal or equitable interest in a Competitive Business, with a limited exception of owning 3% or less in a publicly traded company that is a Competitive Business. They are also restricted from operating, managing, funding, or performing services for a Competitive Business, diverting business or customers from Mrcool, and inducing customers to other businesses that are not Mrcool Centers. These restrictions also apply to the franchisee's owners and spouses, who must sign a Franchise Owner and Spouse Agreement and Guaranty.
Upon termination or transfer of the agreement, franchisees must immediately cease operating as a Mrcool franchisee and refrain from representing themselves as a current or former franchisee. They must also stop using the Mrcool System, including Confidential Information, Licensed Marks, Business Management System Data, and the Operations Manual. Franchisees are prohibited from using any methods, procedures, or techniques associated with the Mrcool System, System Supplies, and Approved Services and Products. Additionally, they must discontinue using any advertising, marketing, media, and other information associated with Mrcool.
Furthermore, franchisees are required to return the Operations Manual, Confidential Information (including Business Management System Data and customer lists), and all other confidential materials and property owned by Mrcool. However, franchisees may retain copies of the Franchise Agreement, correspondence with Mrcool, and other documents required by law, excluding any Confidential Information contained within those documents. These measures ensure the protection of Mrcool's proprietary system and brand identity, preventing unfair competition and maintaining the integrity of the franchise network.