Under what circumstances is Mrcool not liable to the franchisee for damages related to the Business Management System?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
If, at any time, the Franchised Business is not being managed by a Managing Owner or Operating Manager who satisfactorily completed the Training Program, Franchisor is authorized, but is not required, to immediately appoint a manager to maintain the operations of the Franchised Business for and on behalf of Franchisee.
Franchisor's appointment of a manager of the Franchised Business does not relieve Franchisee of its obligations or constitute a waiver of Franchisor's right to terminate the Franchise pursuant to Article 16.
Franchisor is not liable for any debts, losses, costs or expenses incurred in the operations of the Franchised Business or to any creditor of Franchisee for any products, materials, supplies or services purchased by the Franchised Business while it is managed by Franchisor's appointed manager.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, Mrcool is not liable for any debts, losses, costs, or expenses incurred in the operations of the Franchised Business while it is managed by a manager appointed by Mrcool. This includes any debts to creditors of the franchisee for products, materials, supplies, or services purchased during the period when the Mrcool-appointed manager is in charge.
This situation arises if the franchisee's Managing Owner or Operating Manager has not satisfactorily completed the required Training Program. In such cases, Mrcool has the authority, but not the obligation, to appoint a manager to oversee the business operations on behalf of the franchisee.
This clause protects Mrcool from financial liabilities that may arise from the management of the franchise during the interim period when their appointed manager is running the business. However, it's important to note that Mrcool's decision to appoint a manager does not relieve the franchisee of their obligations under the Franchise Agreement, nor does it waive Mrcool's right to terminate the franchise agreement.