Where will binding arbitration take place for Cool Binz disputes?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
al dispute resolution procedure before you may bring your dispute before a third party. This agreement to first attempt resolution of disputes internally shall survive termination or expiration of this Agreement.
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- Arbitration. At our option, all claims or disputes between us, our shareholders, officers, directors, agents and employees and you, arising out of, or in any way relating to, this Agreement or any other agreement by and between you and us or our affiliates, or any of the parties' respective rights and obligations arising from such agreement, or the operation of the COOL BINZ Business which are not first resolved through the internal dispute resolution procedure set forth in Section 15.F.1 above, must be submitted to binding arbitration in Ann Arbor, Michigan under the auspices of the American Arbitration Association ("AAA"), in accordance with AAA's Commercial Arbitration Rules then in effect, with an arbitrator with at least five (5) years of franchise law experience. We may specifically enforce our rights to arbitration. Each party shall bear its own cost of arbitration and you and we shall share costs of the arbitrator equally. This agreement to arbitrate shall survive any termination or expiration of this Agreement.
- a. Notwithstanding the foregoing, we shall not be required to arbitrate, and may initiate litigation in court, in accordance with the procedure set forth in Section 15 F.3, any controversy, dispute, or claim as set forth in this Section 15.F.2 if such controversy, dispute, or claim concerns an allegation that you have violated (or threaten to violate, or pose an imminent risk of violating):
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- Any federally protected intellectual property rights in the Marks, the System, trade secrets, or Confidential Information;
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- Any claims pertaining to or arising out of any warranty issue;
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- Any of the restrictive covenants contained in this Agreement;
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Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, binding arbitration for disputes will take place in Ann Arbor, Michigan. This process will occur under the rules of the American Arbitration Association (AAA), utilizing an arbitrator with a minimum of five years of experience in franchise law. This means that if a franchisee has a dispute with Cool Binz that cannot be resolved internally, the franchisee may be required to travel to Ann Arbor, Michigan for arbitration.
Cool Binz retains the option to enforce its rights to arbitration, and the agreement to arbitrate survives any termination or expiration of the franchise agreement. Each party is responsible for their own arbitration costs, while the costs of the arbitrator will be shared equally between Cool Binz and the franchisee. This arrangement is fairly typical in franchising, where arbitration is often used to resolve disputes more efficiently than litigation.
However, Cool Binz is not required to arbitrate in certain situations, such as allegations of violations of intellectual property rights, warranty issues, restrictive covenants, fraud or misrepresentation by the franchisee, insolvency, or claims where the damages alleged are less than $50,000. In these cases, Cool Binz may initiate litigation in court. This is a significant exception, as it allows Cool Binz to choose a judicial forum in cases it deems critical to its brand or financial interests. A prospective franchisee should consider the potential costs and inconvenience of arbitrating in Michigan, as well as the circumstances under which Cool Binz might choose to litigate instead.