Does the definition of 'transfer' by a Cool Binz franchisee include the transfer of the Cool Binz Business?
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. |
| l. | Franchisor's approval of transfer by franchisee | Section 10.B | We must approve all transfers, but we will not unreasonably withhold our approval if you meet our conditions. |
| m. | Conditions for franchisor approval of transfer | Section 10.B | Conditions to transfer: (i) you are in full compliance with the Franchise Agreement or any agreement between you and us, our affiliates, or our designated/approved supplies and vendors, and you have paid all accrued monetary obligations to us, our affiliates, and our designated/approved supplies and vendors; (ii) the transferee meets our then current standards; (iii) the transferee is not operating a competitive business, unless all competitive services as part of the COOL BINZ Business; (iv) you permit us to release to the transferee information about the COOL BINZ Business; (v) transferee signs the then-current form of franchise agreement; (vi) you guarantee the performance of transferee if you finance the sale/assignment; (vii) you pay us a transfer fee, all Royalties and other fees owed, and all commissions, referral and broker fees, if applicable; (viii) transferee completes training; (ix) transferee assumes all obligations to customers and clients; (x) you and the transferee sign a general release (such requirement to sign a general release is subject to change in our sole discretion); |
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 explicitly includes the transfer of the Cool Binz Business. This definition extends beyond just the franchise agreement itself. It also encompasses any part of the Cool Binz Business. Furthermore, a change in the franchisee's ownership structure is also considered a transfer.
This broad definition of 'transfer' has significant implications for a prospective Cool Binz franchisee. Any action that alters ownership or control of the business, even partially, falls under the transfer provisions of the franchise agreement. This means that Cool Binz has the right to approve or deny such changes. The franchisee must adhere to specific conditions outlined in the franchise agreement to get approval for the transfer.
Cool Binz maintains control over who operates a franchise and ensures that any new operator meets their standards. The conditions for transfer include being in full compliance with the Franchise Agreement, the transferee meeting Cool Binz's current standards, and the transferee not operating a competitive business. The transferee must also sign the current form of the franchise agreement and complete training. The franchisee must pay a transfer fee and ensure the transferee purchases an Initial Promotional Package.
Additionally, Cool Binz retains the right of first refusal to acquire the franchisee's business before it can be transferred to a third party. This provision allows Cool Binz to purchase the franchise on the same terms and conditions offered by another potential buyer. This level of control is typical in franchising, as franchisors seek to maintain brand consistency and protect their system.