What is the dependency between the equipment usage and the Cool Binz Franchise Agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- **4.
EQUIPMENT USAGE.** Franchisee agrees not to use the Equipment in any business or manner other than in the conduct of the Business pursuant to the Franchise Agreement.
Franchisee acknowledges that the Equipment is proprietary to the COOL BINZ franchise system.
The Equipment can only be used in connection with COOL BINZ authorized services.
Any usage
contrary to this provision shall be considered to be a breach of the Franchise Agreement, the Promissory Note, and this Agreement.
- **6.
RETURN OF EQUIPMENT.** Upon expiration or termination of the Franchise Agreement, Franchisee will cooperate with CBI to repurchase all or some of the Equipment pursuant to the terms in the Franchise Agreement, unless Franchisee has arranged for the sale of the Equipment to another COOL BINZ franchisee with the consent of CBI.
- **7.
COVENANTS OF FRANCHISEE.** 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.
- **8.
GRANT OF SECURITY INTEREST.** In the event Franchisee's purchase of the Equipment sold under the Invoice is financed by CBI, Franchisee hereby grants to CBI a continuing security interest in the Equipment sold to Franchisee, and any additions, accessions, accessories, attachments and replacements of such Equipment, any proceeds and products.
The security interest shall continue for the term of this Agreement to secure Franchisee's obligations under this Agreement.
Franchisee authorizes CBI to file a financing statement with regards to the Equipment without the necessity of obtaining an additional signature from Franchisee.
The rights and remedies of CBI as a secured party under this Agreement and under applicable law are cumulative and non-exclusive.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the use of equipment is strictly tied to the Franchise Agreement. A franchisee must only use the equipment in conducting the Cool Binz business as outlined in the Franchise Agreement. The equipment is considered proprietary to the Cool Binz franchise system and can only be used for authorized services. Any unauthorized use is a breach of the Franchise Agreement, the Promissory Note, and the agreement related to equipment usage.
Upon the termination or expiration of the Franchise Agreement, the franchisee must cooperate with Cool Binz to repurchase all or some of the equipment, unless the franchisee arranges to sell the equipment to another Cool Binz franchisee with Cool Binz's consent. The franchisee is responsible for maintaining the equipment lawfully and in accordance with all applicable laws and regulations. They must also handle all taxes, fees, and charges associated with the equipment and keep it free from any liens or encumbrances, except for those incurred through initial financing with Cool Binz or an approved vendor.
Furthermore, the franchisee is obligated to maintain property insurance on the equipment and adhere to the manufacturer's maintenance, repair, and replacement instructions. They must also ensure that all notices and labels indicating Cool Binz's ownership are properly displayed. If the equipment purchase is financed by Cool Binz, the franchisee grants Cool Binz a security interest in the equipment to secure the franchisee's obligations under the agreement. This security interest remains in effect for the duration of the agreement, and Cool Binz is authorized to file a financing statement without requiring an additional signature from the franchisee.