Under what conditions will a Mrcool franchisee NOT have a Designated Territory?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
If Schedule 1 is not completed and/or is not signed by Franchisor there shall be no Designated Territory.
- (1) During the Term of this Agreement and subject to the rights of Franchisor including, but not limited to, the Reserved Rights, Franchisor grants to Franchisee and Franchisee accepts, the nonexclusive license, right and obligation to develop and operate, one MRCOOL Center in conformity with the System and this Agreement from a single fixed Center location, selected by Franchisee but requiring the approval of Franchisor ("Franchisee's Center Location") and, as designated by Franchisor in Franchisor's discretion and Reasonable Business Judgment, within a Designated Territory;
- (2) If, as of the Effective Date, Franchisee has selected a proposed Center Location that Franchisor approves as Franchisee's Center Location, then Franchisee's Center Location and Designated Territory, if any, shall be identified in Schedule 1 of this Agreement. To be effective, Schedule 1 must be completed and signed by Franchisor. Franchisee's execution of Schedule 1 with a specific location for Franchisee's Center Location shall constitute Franchisee's obligation to develop and operate the Franchised Business at the designated Franchisee Center Location;
- (3) If, as of the Effective Date, Franchisee has not selected a proposed Center Location, and/or has not obtained Franchisor's approval of the proposed Center Location, and/or Schedule 1 to this Agreement is left incomplete or is not signed by Franchisor, Franchisee must locate, identify and secure a Center Location for the Franchised Business in accordance with the terms of this Agreement, including the requirement that Franchisee must obtain Franchisor's approval of
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, a franchisee will not have a designated territory if Schedule 1 of the Franchise Agreement is not completed and/or signed by Mrcool. Schedule 1 is the document that identifies the franchisee's Center Location and Designated Territory, if any, as of the Effective Date of the agreement.
If, as of the Effective Date, the franchisee has not selected a proposed Center Location, or Mrcool has not approved the proposed location, or Schedule 1 is incomplete or unsigned by Mrcool, the franchisee must find and secure a Center Location according to the agreement's terms. Mrcool's approval of the proposed Center Location must be in writing and evidenced by Mrcool's execution of Schedule 1 with a specific Center Location designated. At the time of approving the Center Location by executing Schedule 1, Mrcool will determine the franchisee's Designated Territory, using its discretion and reasonable business judgment.
In practical terms, this means that a prospective Mrcool franchisee might initially sign the franchise agreement without a guaranteed territory. The franchisee bears the responsibility of finding an acceptable location. Only after Mrcool approves the location and signs Schedule 1 will a Designated Territory be assigned, and even then, assignment of a territory is not guaranteed. This arrangement carries risk for the franchisee, who could invest time and resources into finding a location without assurance of receiving a protected territory.