Are the attorney's fees that a Cool Binz franchisee might have to pay limited to only reasonable fees?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Enter upon the COOL BINZ Business premises and exercise complete authority with respect to the operation of the COOL BINZ Business until such time as we determine, in our sole discretion that the default has been cured, and you are otherwise in compliance with this Agreement. In the event we exercise the rights described in this Section, you must pay us a reasonable management fee and reimburse us for all reasonable costs and overhead, if any, incurred in connection with our operation of your COOL BINZ Business including, without limitation, costs of personnel for supervising and staffing the COOL BINZ Business and their travel and lodging accommodations, plus a 20% service charge. This fee is in addition to the payment of the Royalty and all other fees due under this Agreement during the time we exercise our rights under this Agreement. If we undertake to operate the COOL BINZ Business pursuant to this Section, you agree to indemnify and hold us (and our representative(s) and employees) harmless from and against any fines, claims, suits or proceedings that may arise out of our operation of the COOL BINZ Business.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
Based on the 2025 Cool Binz Franchise Disclosure Document, there is no explicit mention of attorney's fees being limited to 'reasonable' fees. However, the document does state that if Cool Binz exercises its right to operate a franchisee's business due to uncured defaults, the franchisee must reimburse Cool Binz for 'all reasonable costs and overhead' incurred in connection with their operation of the Cool Binz business. This reimbursement includes costs of personnel for supervising and staffing the Cool Binz Business and their travel and lodging accommodations, plus a 20% service charge.
This suggests that while attorney's fees are not specifically addressed, other costs that a franchisee might be responsible for are subject to a reasonableness standard. It is important to note that this reasonableness standard applies in a specific scenario where Cool Binz takes over operations due to the franchisee's default.
A prospective Cool Binz franchisee should seek clarification from the franchisor regarding potential scenarios where they might be responsible for the franchisor's attorney's fees and whether those fees would be subject to a reasonableness standard. It would also be prudent to consult with a legal professional to fully understand the implications of the franchise agreement regarding attorney's fees and other potential costs.