Under what circumstances related to the
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
6.A.(3), or Article 16.A.(4) of this Agreement.
- (2) Defaults and Automatic Termination upon Written Notice without Cure Period Franchisee shall be in default of this Agreement, and, this Agreement may be terminated by Franchisor, at Franchisor's sole discretion, upon written notice from Franchisor to Franchisee and without providing Franchisee any opportunity to cure, upon the occurrence of any one or more of the following actions, inactions, omissions, events, and/or circumstances, with such termination effective on the date of Franchisor's notice:
- (a) Franchisee, on three or more instances and/or occasions, engages, commits, and/or suffers an action, inaction, omission, event, and/or circumstance that constitutes or qualifies as a default under Articles 16.A.(3) and/or 16.A.(4) of this Agreement, irrespective of whether or not such action, inaction, omission, event, and/or circumstance is the subject of a notice of default from Franchisor to Franchisee pursuant to Articles 16.A.(3) and/or 16.A.(4) of this Agreement and irrespective of whether or not such default was timely cured and irrespective of whether or not Franchisee paid any penalties or additional fees to Franchisor;
- (b) Franchisee, intentionally and knowingly, refuses to comply with and/or breaches any term, condition, provision, and/or requirement of this Agreement with the intent of causing harm to Franchisor, the System, other System franchisee and/or customers of the Franchised Business;
- (c) Franchisee intentionally, knowingly, with prior notice, and/or through negligence, at any time, develops, manages, maintains, and/or operates the Franchised Business in violation of federal, state, and/or local laws, rules, regulations, ordinances, permits, codes and/or conduct resulting in a foreseeable, immediate and/or imminent threat to the health and/or safety of any third party including customers, employees, and/or the public at large;
- (d) Franchisee abandons, surrenders and/or fails to continuously and actively operate the Franchised Business, unless prevented from doing so by casualty that is the subject of Article 7.D. of this Agreement and that is cured/remedied in accordance with Article 7.D.;
- (e) Franchisee loses and/or fails to maintain possession of the leasehold and/or other legal interests providing Franchisee with the uninterrupted legal right and ability to occupy and to continue to occupy Franchisee's Center Facility throughout the Term and to maintain and
operate Franchised Business in accordance with the terms of this Agreement and the standards, specifications, and requirements set forth in the Operations Manual and/or as otherwise communicated by Franchisor from time to time;
- (f) Franchisee and/or Franchisee's Owners intentionally misrepresent and/or omit material information in Franchisee's application;
- (g) As to information, records, statements, and/or data that Franchisee must maintain and/or report to Franchisor pursuant to the terms of this Agreement, the Operations Manual, or as otherwise requested by Franchisor from time to time, the information, records, statements, and/or data maintained by Franchisee and/or reported by Franchisee contains intentional inaccuracies and/or material inaccuracies that are either misleading or false;
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, a franchisee can be in default of their agreement under several circumstances. One such circumstance is if the franchisee engages in actions that would qualify as a default under Articles 16.A.(3) and/or 16.A.(4) of the agreement on three or more occasions, regardless of whether the franchisor issued a notice of default or whether the franchisee cured the default or paid penalties.
Another cause for default is if the franchisee intentionally refuses to comply with any term of the agreement with the intent of causing harm to Mrcool, the system, other franchisees, or customers. Default can also occur if the franchisee knowingly violates laws or regulations in a way that threatens the health or safety of third parties. Abandoning the business or losing the legal right to occupy the premises also constitutes default, unless due to a casualty event that is properly remedied.
Furthermore, the agreement outlines a 30-day cure period for certain defaults after written notice from Mrcool. These include failing to comply with any term of the agreement not covered under Articles 16.A.(1), 16.A.(2), or 16.A.(3), failing to comply with any term of any other agreement between the franchisee and Mrcool or its affiliates, and failing to secure an approved lease agreement or ownership interest in the center location. These stipulations are important for prospective franchisees to understand, as repeated or intentional breaches can lead to termination of the franchise agreement.