What topic is covered in Section 2.D of the Mrcool Franchise Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
2.D. RESERVATION OF RIGHTS
Franchisor on behalf of itself, its affiliates, parents, and its assigns retains all rights, on any and all terms and conditions that Franchisor deems advisable and without any compensation or consideration to Franchisee to engage in the following activities (the "Reserved Rights"): (a) operate and grant to others the right to operate a Franchised Business, MRCOOL Center and/or other Centers using the System and Licensed Marks at locations outside Franchisee's Designated Territory; (b) acquire or merge with or otherwise affiliate with one or more businesses of any kind, including businesses that are Competitive Businesses, and after such acquisition, merger or affiliation to own and operate and to franchise or license others to own and operate and to continue to own and operate such businesses, including Competitive Businesses (but not utilizing the Licensed Marks) within Franchisee's Designated Territory; (c) be acquired by or merge with or otherwise affiliate with one or more businesses of any kind, including businesses that are Competitive Businesses, even if such business or businesses presently or, in the future, own and operate and franchise or license others to own and operate such businesses, including Competitive Businesses (but not utilizing the Licensed Marks) within Franchisee's Designated Territory; (d) use the Licensed Marks and System to distribute the Approved Services and Products or products and services similar to the Approved Services and Products in Alternative Channels of Distribution within or outside Franchisee's Designated Territory; (e) operate and grant to others the right to operate a MRCOOL Center at Captive Markets, both within and outside Franchisee's Designated Territory; and (f) use the Licensed Marks and System and to license others to use the Licensed Marks and System to engage in all other activities not expressly prohibited by this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, Section 2.D of the Franchise Agreement outlines the rights that the franchisor reserves for itself, its affiliates, parents, and assigns. These "Reserved Rights" allow Mrcool to engage in various activities without providing compensation to the franchisee.
Specifically, Mrcool retains the right to operate or franchise businesses using the Mrcool system and licensed marks outside the franchisee's designated territory. They can also acquire, merge, or affiliate with other businesses, including competitors, and continue operating those businesses (without using Mrcool's licensed marks) even within the franchisee's territory. Mrcool can also be acquired by or merge with businesses that are competitive businesses. Furthermore, Mrcool can use its licensed marks and system to distribute approved products and services through alternative channels of distribution, both within and outside the franchisee's territory.
Mrcool also reserves the right to operate or franchise Mrcool Centers in "Captive Markets" (locations with limited consumer choice, such as airports or universities) regardless of the franchisee's territory. Finally, Mrcool retains the right to engage in any activities not explicitly prohibited by the Franchise Agreement. This section essentially clarifies the boundaries of the franchisee's exclusivity and highlights the areas where Mrcool maintains control and can compete, directly or indirectly, with its own franchisees.
For a prospective franchisee, this section is crucial for understanding the limitations of their territorial rights and the potential for competition from the franchisor itself or other entities affiliated with Mrcool. It is important to carefully consider these reserved rights and their potential impact on the franchisee's business before investing in a Mrcool franchise.