What is the specific definition of 'default' in the context of the Mrcool Multi-Unit Development Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
| Development Center Initial Franchise Fee for Other Development Centers | |
|---|---|
| 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)
Based on the 2025 Mrcool Franchise Disclosure Document, a specific definition of 'default' within the context of the Multi-Unit Development Agreement is not provided. However, the FDD does reference 'default' in the context of the Multi-Unit Development Agreement, stating that a franchisee must not be in default of the terms of the agreement to receive a waived Development Center Initial Franchise Fee for additional Development Centers. This fee is listed as $0.
Without a clear definition of 'default,' prospective Mrcool franchisees should be aware that any violation of the Multi-Unit Development Agreement's terms could potentially trigger a default status. This could jeopardize the franchisee's ability to open additional centers under the favorable terms of the development agreement, such as the waived initial franchise fee. Defaulting on any Franchise Agreement or other agreement with Mrcool could also impact the franchisee's ability to develop additional centers.
To fully understand the implications of a 'default' status, a prospective franchisee should ask Mrcool for a comprehensive list of actions or omissions that would constitute a default under the Multi-Unit Development Agreement. Understanding the specific conditions that could lead to a default is crucial for managing risk and ensuring compliance with the agreement's terms.