Under what circumstances might Mrcool enter into a Site Selection Acknowledgment with a franchisee?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) If, as of the Effective Date or other appropriate periods after the Effective Date, Franchisee has not selected a proposed Center Location that is approved by Franchisor but, Franchisee has identified an area in which Franchisee may look to secure a Center location for the Franchised Business, Franchisor, in Franchisor's discretion and Reasonable Business Judgment, may enter into the Site Selection Acknowledgment attached to this Agreement as Exhibit 3.
If executed by Franchisor, within the Exhibit 3 Site Selection Acknowledgment, Franchisor shall designate a geographic area (the "Site Selection Area") within which Franchisor, during the Site Selection Period, shall not, on behalf of any third party, approve any new Center Location.
Franchisee agrees that the Site Selection Acknowledgment does not constitute Franchisor's approval of a proposed Center Location, does not constitute Franchisor's designation of Franchisee's Designated Territory, does not afford Franchisee any territorial rights in or to the Site Selection Area, and does not extend and/or modify any obligation on the part of Franchisee to timely secure an approved Center Location in accordance with the terms of this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, Mrcool may enter into a Site Selection Acknowledgment with a franchisee under specific circumstances related to site selection. If a franchisee has not selected a proposed center location approved by Mrcool by the effective date of the franchise agreement, but has identified a potential area for the location, Mrcool may, at its discretion and using reasonable business judgment, enter into the Site Selection Acknowledgment. This acknowledgment is attached to the franchise agreement as Exhibit 3.
If Mrcool executes the Site Selection Acknowledgment, it will designate a geographic area (the "Site Selection Area") where it will not approve any new center locations for other third parties during the Site Selection Period. However, the document explicitly states that the Site Selection Acknowledgment does not constitute Mrcool's approval of a proposed center location, does not designate the franchisee's territory, does not grant any territorial rights in the Site Selection Area, and does not modify the franchisee's obligation to secure an approved center location in a timely manner.
In essence, the Site Selection Acknowledgment provides a limited period during which Mrcool will not approve competing locations in a specific area while the franchisee seeks a suitable site. This can be beneficial for franchisees who need additional time to find the right location without immediate competitive pressure from other Mrcool franchises. However, it's crucial to understand that this acknowledgment does not guarantee site approval or any exclusive rights to the area, and the franchisee remains responsible for securing an approved location according to the franchise agreement terms.