After Cool Binz collects assigned accounts receivable, what happens to the collected sums?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- assign any and all accounts receivable to us for collection, unless all Royalties and other payment obligations to us are paid in full. In connection with this assignment, you appoint us as attorney-in-fact to engage in these collection activities and you
specifically refrain from engaging in any of these collection activities. We must employ good faith efforts, including where appropriate in our sole and exclusive judgment the commencement of legal proceedings to collect the accounts receivable. We have no duty or obligation to you to accomplish the collection of such accounts receivable. We will remit to you any of these sums collected after first deducting all moneys owed to us and our costs of collection;
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, if a franchisee's agreement is terminated, the franchisee must assign all accounts receivable to Cool Binz for collection, provided that all royalties and other payment obligations to Cool Binz are not paid in full. Cool Binz will act as the franchisee's attorney-in-fact to collect these receivables and the franchisee must not engage in these collection activities.
Cool Binz is required to make good faith efforts to collect the accounts receivable, including starting legal proceedings if deemed appropriate. However, Cool Binz has no obligation to guarantee the collection of these accounts.
After Cool Binz collects the accounts receivable, they will remit the sums collected to the franchisee, but only after deducting all monies owed to them and their costs of collection. This means the franchisee will only receive the remaining balance after Cool Binz has covered its expenses and any outstanding debts owed by the franchisee.