Does the Cool Binz franchise agreement create a partnership, joint venture, or agency relationship between the franchisor and franchisee?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
effect of creating confusion or question regarding your affiliation with the System or us.
14. RELATIONSHIP OF THE PARTIES/INDEMNIFICATION.
A. INDEPENDENT CONTRACTORS.
You acknowledge and agree that, under this Agreement; you are and will be an independent contractor of ours. You will not be deemed an employee of ours for any purpose, and no employee of yours will be deemed to be an employee of ours for any purpose, most particularly with respect to any mandated or other insurance coverage, tax, or contributions, or requirements pertaining to withholdings, levied or fixed by any city, state, or federal governmental agency. Nothing in this Agreement will be construed so as to create a partnership, joint venture, or agency. You do not have any power to obligate us for any expenses, liabilities, or other obligations, other than as is specifically provided for in this Agreement. We will not have the power to hire or fire your employees and, except as expressly provided in this Agreement, we may not control or have access to your funds or expenditures, or in any other way exercise dominion or control over the COOL BINZ Business.
You must identify yourself conspicuously in all dealings with customers, suppliers, public officials, the COOL BINZ Business' employees, and others, and in the manner we prescribe, as
the owner of the COOL BINZ Business under a franchise agreement that we have awarded and to place notices of independent ownership on the forms, business vehicles, stationery, and advertising, and other materials we require you to use.
B. NO LIABILITY FOR ACTS OF OTHER PARTY.
Neither you nor we will make any express or implied agreements, warranties, guarantees, or representations or incur any debt in the name of or on behalf of the other party, or represent that the relationship between you and us is other than that of franchisor and franchisee.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, the franchise agreement explicitly states that the relationship between the franchisor and franchisee is that of independent contractors. This means that the franchisee is not considered an employee of Cool Binz, and Cool Binz does not have the power to control the franchisee's funds or expenditures, or hire and fire their employees. The agreement specifies that nothing within it should be interpreted as creating a partnership, joint venture, or agency relationship.
This independent contractor status has several implications for a prospective Cool Binz franchisee. The franchisee is responsible for their own insurance coverage, taxes, and other contributions, without reliance on Cool Binz. The franchisee must also clearly identify themselves as an independent owner operating under a franchise agreement in all dealings with customers, suppliers, and employees. This includes placing notices of independent ownership on forms, business vehicles, and advertising materials.
Furthermore, neither Cool Binz nor the franchisee can make agreements or incur debts on behalf of the other party, and neither can represent their relationship as anything other than franchisor and franchisee. Cool Binz assumes no liability for any unauthorized agreements, representations, or warranties made by the franchisee, or for any damages arising from the franchisee's operation of the Cool Binz business. This reinforces the arms-length nature of the relationship, where each party is responsible for their own actions and obligations.
This type of arrangement is typical in franchising, where the franchisor provides the brand, system, and support, while the franchisee manages and operates the business independently. It's crucial for potential Cool Binz franchisees to understand this independent contractor relationship, as it defines their responsibilities and liabilities in operating the franchise.