Does the Cool Binz Franchise Agreement require disputes to be submitted to binding arbitration?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| with any of your customers or former customers, within: (i) the Territory; (ii) the Territories of any COOL BINZ franchisees, COOL BINZ Company Store, or any other COOL BINZ business operator; or (iii) a radius of 50 miles from the Territory. This provision is subject to state law. | |||
| s. | Modification of Agreement | Section 15.J | Modification of the Franchise Agreement must be in writing and agreed upon by both parties. |
| t. | Integration/me rger clause | Section 15.L | Only the terms of the Franchise Agreement are binding (subject to state law). Any representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. | Dispute resolution by arbitration | Sections 15.F.1 and 15.F.2 | You must bring any disputes arising out of the Franchise Agreement or any other agreement with us to our President prior to bringing a claim before any third party in an attempt to resolve the dispute internally. After exhaustion of this internal dispute resolution procedure, all claims or disputes between you and us must be submitted to binding arbitration in Ann Arbor, Michigan, in accordance with the American Arbitration Association's Commercial Arbitration Rules then in effect. This provision is subject to state law. |
| v. | Choice of forum | Section 15.F.3 | All claims not subject to arbitration must be commenced in the state, or federal court of general jurisdiction in Washtenaw County, Michigan or the United States District Court for the Eastern District of Michigan (subject to applicable state law). |
| w. | Choice of law | Section 15.H | Except federal law, Michigan law applies (sub |
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, disputes arising out of the Franchise Agreement must be submitted to binding arbitration. Prior to initiating a claim with a third party, a franchisee must first attempt to resolve the dispute internally with Cool Binz's President. After exhausting this internal process, any remaining claims or disputes between the franchisee and Cool Binz must be submitted to binding arbitration in Ann Arbor, Michigan. The arbitration will be conducted in accordance with the American Arbitration Association's Commercial Arbitration Rules then in effect. This arbitration provision is subject to state law.
This means that a Cool Binz franchisee is required to attempt to resolve disputes informally with the franchisor before pursuing other avenues. If that informal process fails, the franchisee must then resolve the dispute through binding arbitration rather than through a lawsuit in court. Binding arbitration means that the arbitrator's decision is final and generally cannot be appealed.
Arbitration is a common method of dispute resolution in franchising, as it can be faster and less expensive than litigation. However, it also means that a franchisee gives up the right to a jury trial and the ability to pursue certain legal remedies. The FDD also specifies that claims not subject to arbitration must be commenced in the state or federal court of general jurisdiction in Washtenaw County, Michigan, or the United States District Court for the Eastern District of Michigan, subject to applicable state law. Furthermore, Michigan law applies to the agreement, except for federal law, and is also subject to applicable state law.