What amounts must a Cool Binz franchisee pay upon termination of the franchise agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| or any other lien is placed against you and not released or bonded within 30 days; (xx) you become insolvent; (xxi) you order or purchase supplies, signs, furnishings, fixtures, equipment or inventory from an unapproved supplier; (xxii) you misuse or make unauthorized use of any COOL BINZ /Required Software; (xxiii) you fail to comply with the anti-terrorism provision; (xxiv) you take for your own personal use any assets or property of the COOL BINZ Business; or (xxv) if there are insufficient funds in your bank account to cover a check or EFT payment 3 or more times within any 12-month period or you fail to achieve minimum sales for 3 consecutive months. These provisions are subject to state law. | |||
| i. | Franchisee's obligations on termination/no n-renewal | Section 13 | Upon termination or early expiration of the Franchise Agreement, your obligations include: (i) pay all amounts owed to us; (ii) de identify and otherwise stop using the Marks in any manner, including in business names and telephone listings; (iii) return all Confidential Information and customer lists to us; (iv) comply with post-term non-competition covenants; and (v) deliver proof of compliance. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–58)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, upon termination or early expiration of the Franchise Agreement, a franchisee is obligated to pay all amounts owed to Cool Binz. Additionally, the franchisee must de-identify and cease using the Cool Binz Marks in any manner, including business names and telephone listings. They must also return all Confidential Information and customer lists to Cool Binz, comply with post-term non-competition covenants, and deliver proof of compliance.
This means that if a Cool Binz franchise is terminated, the franchisee must settle all outstanding financial obligations with the franchisor. This could include unpaid franchise fees, royalties, or any other debts incurred during the franchise agreement. Furthermore, the franchisee is legally bound to remove all Cool Binz branding from their business and return any proprietary information to the company.
The obligation to comply with post-term non-competition covenants restricts the franchisee's ability to engage in similar businesses after the termination of the agreement. This prevents the franchisee from directly competing with Cool Binz using the knowledge and experience gained during the franchise term. The franchisee must also provide proof that they have met all these obligations to Cool Binz after termination.
Prospective franchisees should carefully review the specific terms of the Franchise Agreement regarding termination and the associated financial and operational obligations. Understanding these requirements is crucial for making informed decisions and avoiding potential disputes upon termination or expiration of the franchise agreement.