What does the Equipment Sales and Security Agreement say about the Cool Binz franchisee's usage of the equipment?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
d encumbrances, and that the Equipment conforms to the requirements set by CBI under the Franchise Agreement. CBI offers no other warranty and assigns to Franchisee any and all rights to any express or implied warranty of each Equipment manufacturer. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES ON THE EQUIPMENT OFFERED, GIVEN OR PROVIDED BY CBI INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
- 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.
- 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, the Equipment Sales and Security Agreement outlines specific stipulations regarding equipment usage. Cool Binz franchisees must use the equipment solely for conducting business as outlined in the Franchise Agreement. The equipment is considered proprietary to the Cool Binz franchise system and can only be used for Cool Binz authorized services. Any unauthorized use is a breach of the Franchise Agreement, the Promissory Note, and the Equipment Sales and Security Agreement.
The agreement also places restrictions on reselling the equipment. Franchisees cannot sell, lease, or rent the equipment to any other party unless explicitly permitted by Cool Binz. The equipment is exclusively for use within the Cool Binz franchise network. A franchisee can only transfer title to the equipment by selling it to another Cool Binz franchisee in good standing, subject to Cool Binz's first right of refusal and approval. If Cool Binz financed the equipment, the proceeds must first cover any outstanding balance on the Promissory Note. Additionally, the transferring franchisee's account with Cool Binz must be current, and the purchasing franchisee cannot have any pending defaults.
Furthermore, if a franchisee is terminating or not renewing their Franchise Agreement but owns another Cool Binz franchise, the equipment and associated liabilities can be transferred to that other franchise upon written request. Cool Binz also commits to repurchase the storage containers (bins) based on a schedule that considers the age of the bins and their condition, with adjustments made for missing components, damage, or excessive wear and tear. Upon termination or expiration of the Franchise Agreement, the franchisee must cooperate with Cool Binz to repurchase the equipment, unless the franchisee has arranged a sale to another franchisee with Cool Binz's consent.