Does the definition of 'transfer' by a Cool Binz franchisee include assignment of the Franchise Agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| or any other lien is placed against you and not released or bonded within 30 days; (xx) you become insolvent; (xxi) you order or purchase supplies, signs, furnishings, fixtures, equipment or inventory from an unapproved supplier; (xxii) you misuse or make unauthorized use of any COOL BINZ /Required Software; (xxiii) you fail to comply with the anti-terrorism provision; (xxiv) you take for your own personal use any assets or property of the COOL BINZ Business; or (xxv) if there are insufficient funds in your bank account to cover a check or EFT payment 3 or more times within any 12-month period or you fail to achieve minimum sales for 3 consecutive months. These provisions are subject to state law. | |||
| i. | Franchisee's obligations on termination/no n-renewal | Section 13 | Upon termination or early expiration of the Franchise Agreement, your obligations include: (i) pay all amounts owed to us; (ii) de identify and otherwise stop using the Marks in any manner, including in business names and telephone listings; (iii) return all Confidential Information and customer lists to us; (iv) comply with post-term non-competition covenants; and (v) deliver proof of compliance. |
| j. | "Transfer" by franchisor | Section 10.A | No restriction on our right to assign. |
| k. | "Transfer" by franchisee – definition | Section 10.B | Includes transfer or assignment of the Franchise Agreement, the COOL BINZ Business or any part thereof, and change of your ownership in the franchisee entity and/or COOL BINZ Business. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–58)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the definition of 'transfer' by a franchisee does include the assignment of the Franchise Agreement. The FDD outlines the specific conditions and requirements associated with such a transfer.
Specifically, the Cool Binz FDD states that the definition of transfer by a franchisee includes the "transfer or assignment of the Franchise Agreement". This means that if a franchisee wishes to sell their business, this includes not only the physical assets or operations, but also the legal rights and responsibilities outlined in the Franchise Agreement itself.
This is a standard clause in most franchise agreements, as the franchisor needs to approve who is taking over the obligations of the agreement. Cool Binz requires franchisor approval for all transfers, but states that approval will not be unreasonably withheld if certain conditions are met. These conditions include the franchisee being in full compliance with the Franchise Agreement, the transferee meeting Cool Binz's current standards, and the transferee signing the then-current form of the franchise agreement. The franchisee must also pay a transfer fee and all outstanding royalties and fees.