Under what circumstances might Mrcool require the transferee to execute the then-current standard form Franchise Agreement?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
- (7) If the proposed Transfer includes or entails the Transfer of this Agreement, substantially all of the assets of the Franchised Business, a controlling interest in Franchisee, or is one of a series of Transfers which in the aggregate Transfers substantially all of the assets of the Franchised Business or a controlling interest in Franchisee, then, at the election of Franchisor and upon notice from Franchisor to Franchisee, the transferee may be required to execute (and/or, upon Franchisee's request, shall cause all interested parties to execute) for a term ending on the expiration date of the original Term of this Agreement, the then current standard form Franchise Agreement offered to new franchisees of MRCOOL Centers and any other agreements as Franchisor requires.
Such agreements shall supersede this Agreement and its associated agreement in all respects, and the terms of Franchisor's then current agreements may differ from the terms in this Agreement, provided that such agreements shall provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, Mrcool has the option to require a transferee to execute the then-current standard form Franchise Agreement under specific conditions related to the transfer of the franchise. This condition is at Mrcool's discretion.
Specifically, if the proposed transfer includes the transfer of the existing agreement, substantially all of the assets of the franchised business, a controlling interest in the franchisee, or is one in a series of transfers that collectively achieve the same result, Mrcool can elect to require the transferee to sign the current standard Franchise Agreement. This new agreement would be for a term that ends on the original expiration date of the initial agreement.
The new agreement would supersede the original agreement in all respects. While the terms of Mrcool's current agreements may differ, the new agreement must maintain the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations as the original agreement. This ensures that while the transferee may be subject to updated terms and conditions, the core financial obligations remain consistent with what was initially agreed upon.