What determination has the California Department of Financial Protection and Innovation made regarding Cool Binz's capitalization?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
all have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
The California Department of Financial Protection and Innovation has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a requirement for us to maintain a surety bond under California Corporations Code section
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the California Department of Financial Protection and Innovation has determined that Cool Binz has not demonstrated adequate capitalization and/or that it must rely on franchise fees to fund its operations. This determination has led to a requirement for Cool Binz to maintain a surety bond under California Corporations Code section 31113 and 10 C.C.R. section 310.113.5, which must remain in effect during its registration period.
This surety bond is in the amount of $59,900 with the Hartford, and it is available for franchisees to recover damages if Cool Binz does not fulfill its obligations to open the franchised business. Cool Binz will provide a copy of the surety bond upon request.
This requirement indicates that California regulators have some concerns about Cool Binz's financial stability and ability to meet its obligations to new franchisees. The surety bond provides a degree of financial protection for franchisees in California, but it is essential for prospective franchisees to conduct their own due diligence and assess the financial health of Cool Binz before investing.