What agreement must the remaining owners of a Cool Binz franchise (those who did not execute the Franchise Agreement) sign?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Before attending the Initial Training and/or upon any change to the legal entity ownership, you must submit to us a corporate resolution, or similar action, which states the name of the corporation or LLC, the legal names of all of the partners or shareholders, the percentage of ownership that each member controls, their place of residence and their agreement to be bound by the terms of the Franchise Agreement. In the case of multiple owners, you must submit a dispute resolution procedure acceptable to us in our sole discretion that states what you will do in the event that there is a conflict between any owners of the franchisee entity. In addition, at all times, the owners who have executed the Franchise Agreement must control 67% of the franchisee entity. The remaining owners must sign a written confidentiality and non-compete agreement in the form we prescribe. All owners and their spouses are required to sign the personal Guaranty Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 52–53)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, if there are multiple owners of a Cool Binz franchise, the owners who have executed the Franchise Agreement must control at least 67% of the franchisee entity. The remaining owners, those who did not execute the Franchise Agreement, must sign a written confidentiality and non-compete agreement in the form prescribed by Cool Binz. All owners and their spouses are also required to sign a personal Guaranty Agreement.
This requirement ensures that all owners are bound by certain obligations, even if they are not direct signatories to the Franchise Agreement. The confidentiality and non-compete agreement protects Cool Binz's proprietary information and prevents unfair competition from owners who might leave the business or have a smaller stake. The personal Guaranty Agreement further secures the franchisee's obligations to Cool Binz.
For a prospective Cool Binz franchisee, this means that if you plan to have multiple owners in your franchise, you need to be aware of these requirements. Ensure that the owners who will be actively managing the business and making key decisions hold at least 67% ownership and are the ones who execute the Franchise Agreement. Also, make sure that all other owners are willing to sign the required confidentiality and non-compete agreement and the personal Guaranty Agreement, as these are mandatory conditions.