What is the condition for the Cool Binz franchisee to transfer the Franchise Agreement to the franchisor?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5. TRANSFER OF OWNERSHIP. Franchisee acknowledges that the Franchise Agreement imposes restrictions and limitations on the resale of the Equipment. Franchisee acknowledges that the Equipment may not be sold, leased, or rented to or used by any other party, except under the conditions stated below, as provided in the Franchise Agreement, or as permitted in writing by CBI. The Equipment is proprietary and authorized for use only within the COOL BINZ franchise network. Franchisee covenants that Franchisee will not transfer title to the Equipment except in one of these two ways:
- a. Sell the Equipment to another COOL BINZ Franchisee in good standing under its franchise agreement at a mutually acceptable price. CBI has first right of refusal to purchase the Equipment and must approve any transaction. If CBI financed any portion of the purchase price of the Equipment, the transferee will pay the proceeds to CBI if there is any outstanding balance under the Promissory Note for the Equipment prior to transfer of the Equipment. At the time of transfer Franchisee's account with CBI must be current and the purchasing Franchisee may not have any pending default under any agreement with CBI.
- b. If Franchisee is terminating or not renewing the Franchise Agreement and Franchisee owns another COOL BINZ franchise, the Equipment (and the liability for any amount owing on the purchase price of the Equipment) will be transferred to that franchise upon written request.
- c. CBI will repurchase the storage containers bins (the "Bins") in accordance with the table below. The percentages shown assume reasonable wear and tear and regular maintenance. If any components of the original Bins are missing, or there is damage or excessive wear and tear, CBI reserves the right to make a corresponding adjustment to the repurchase price. The original Bins pricing under its Schedule will be reduced to the applicable percentage in effect based on the time elapsed after original purchase.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a franchisee acknowledges that the Franchise Agreement imposes restrictions and limitations on reselling the equipment. The franchisee may not sell, lease, or rent the equipment to another party except under specific conditions outlined in the Franchise Agreement or with written permission from CBI.
Specifically, the franchisee can transfer title to the equipment in one of two ways. First, they can sell the equipment to another Cool Binz franchisee in good standing, provided the price is mutually acceptable, CBI has the first right of refusal to purchase the equipment, and CBI approves the transaction. If CBI financed any portion of the equipment, the transferee must pay the proceeds to CBI to cover any outstanding balance under the Promissory Note before the transfer. Additionally, the franchisee's account with CBI must be current, and the purchasing franchisee cannot have any pending defaults under any agreement with CBI.
Second, if the franchisee is terminating or not renewing the Franchise Agreement but owns another Cool Binz franchise, the equipment (and the liability for any amount owing on the purchase price of the equipment) will be transferred to that franchise upon written request. CBI will also repurchase the storage containers bins (the "Bins") in accordance with a table, with percentages shown assuming reasonable wear and tear and regular maintenance. If any components of the original Bins are missing, or there is damage or excessive wear and tear, CBI reserves the right to make a corresponding adjustment to the repurchase price. The original Bins pricing under its Schedule will be reduced to the applicable percentage in effect based on the time elapsed after original purchase.
These conditions ensure that the equipment remains within the Cool Binz franchise network and that any financial obligations related to the equipment are properly addressed during the transfer. Prospective franchisees should carefully review these conditions to understand their obligations and options when considering a transfer of ownership.