What does CBI warrant regarding the Cool Binz equipment's title?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee covenants with CBI to (i) use and maintain the Equipment in a lawful manner and so as not to violate any law or regulation of the state, city or other political subdivisions in which Franchisee uses the Equipment; (ii) return, pay and file when due all taxes, fees and similar charges, including without limitation sales or use tax, and ad valorem and personal property taxes, imposed on the ownership, possession or use of the Equipment; (iii) keep the Equipment free and clear of all liens, security interests, claims and encumbrances except for those incurred through the initial financing of the Equipment with CBI or from a vendor approved by CBI; (iv) obtain and maintain property insurance on the Equipment covering loss, damage, theft, vandalism and casualty; (v) maintain the Equipment per the manufacturer's maintenance, repair and replacement instructions; (vi) maintain in place any notices, labels or other indicia provided by CBI to indicate that the Equipment is subject to this Agreement; (vii) operate the Business as required under the Franchise Agreement; and (viii) notify CBI when any party claims any interest in the Equipment.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
Based on the 2025 Cool Binz Franchise Disclosure Document, CBI does not make any explicit warranties regarding the title of the Cool Binz equipment. However, the document does state that the franchisee covenants to keep the equipment free and clear of all liens, security interests, claims, and encumbrances, except for those incurred through the initial financing of the equipment with CBI or from a vendor approved by CBI.
This implies that Cool Binz expects the franchisee to maintain clear title to the equipment, aside from any financing arrangements approved by Cool Binz. The franchisee is responsible for ensuring that no other claims or liens are placed on the equipment during the term of the franchise agreement. This is a standard practice in franchising, as the franchisor wants to ensure that the equipment used in the Cool Binz business is not subject to any third-party claims that could disrupt operations.
Prospective franchisees should carefully review the terms of the franchise agreement and any financing agreements related to the equipment to fully understand their obligations regarding the title and ownership of the equipment. It is advisable to seek legal counsel to clarify any uncertainties and ensure compliance with all applicable laws and regulations.