Under what circumstances is the arbitrator prohibited from awarding or declaring the Licensed Marks to be generic or invalid for Mrcool?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
In connection with binding arbitration, Franchisor and Franchisee further agree that:
- (a) All matters relating to arbitration, will be governed by the United States Federal Arbitration Act, except as expressly or otherwise set forth in this Agreement;
- (b) The arbitration hearing shall be conducted within 180 days of the demand for arbitration;
- (c) The arbitrator shall render written findings of fact and conclusions of law;
- (d) Except as may be otherwise required and/or prohibited by this Agreement including, but not limited to Articles 18.I., 18.J., 18.N, 18.O., 18.R., 18.T., and 18.X. of this Agreement, the arbitrator has the right to award or include in his or her award any relief that he or she determines to be proper, including monetary damages, interest on unpaid sums, specific performance, injunctive relief, attorneys' fees, and costs and expenses as allowable under this Agreement. Notwithstanding the foregoing, under no circumstance shall the Arbitrator be authorized to award or declare the Licensed Marks to be generic or invalid;
- (e) They shall each be bound to the limitations periods set forth in Article 18.I. of this Agreement and that, in any arbitration proceeding, Franchisor and Franchisee must each timely submit, within the same arbitration proceeding, any claim that would constitute a compulsory counterclaim as such claims are defined and set forth under Rule 13 of the United States Federal Rules of Civil Procedure. Any claim that is not submitted or filed as required shall be forever barred;
- (f) Judgment upon the arbitrator's award may be entered in any court of competent jurisdiction; and
- (g) Arbitration and/or any arbitration award must be conducted in accordance with the terms of this Agreement including, but not limited to, the requirements set forth in this Article 18.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, in any binding arbitration between the franchisor and franchisee, the arbitrator is explicitly prohibited from awarding or declaring the Licensed Marks to be generic or invalid. This restriction applies regardless of the specific circumstances of the dispute.
This provision is significant for prospective Mrcool franchisees because it ensures that the arbitrator cannot make a ruling that undermines Mrcool's intellectual property rights. The term 'Licensed Marks' refers to the trademarks, service marks, emblems, and indicia of origin, including the "MRCOOL" trademark and logo, used to identify Mrcool Centers. By preventing the arbitrator from declaring these marks generic or invalid, Mrcool protects its brand identity and the value associated with its trademarks.
For a franchisee, this means that even in a dispute that goes to arbitration, the validity and distinctiveness of the Mrcool brand are protected. This clause aims to maintain the integrity of the Mrcool brand and prevent challenges to its trademarks through arbitration. Franchisees should understand that this limitation on the arbitrator's power is designed to safeguard the franchisor's intellectual property rights, which are essential to the franchise system.