Is there a specific definition of 'default' provided in the Mrcool FDD regarding the Multi-Unit Development Agreement?
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 the 2025 Mrcool FDD, a specific definition of 'default' within the context of the Multi-Unit Development Agreement is not explicitly provided in the excerpts. However, the term 'default' is mentioned in relation to the franchisee's obligations under the Multi-Unit Development Agreement. Specifically, it references adherence to the Development Schedule and compliance with other agreements with Mrcool.
The FDD states that the Development Center Initial Franchise Fee for additional centers is waived, provided the franchisee is not in default of the Multi-Unit Development Agreement, including the Development Schedule, and is not in default of any other agreement with Mrcool. This implies that failing to meet the Development Schedule or breaching other agreements could constitute a default, impacting the franchisee's financial obligations for subsequent centers.
While the FDD excerpts do not provide a comprehensive definition of 'default,' it is clear that adherence to the Development Schedule and compliance with all agreements are critical to remaining in good standing with Mrcool. A prospective franchisee should carefully review the full Multi-Unit Development Agreement and Franchise Agreement to understand all the specific events or conditions that would constitute a default and the potential consequences.