Does the Cool Binz Franchise Agreement require internal dispute resolution before 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 | Section 15.J | Modification of the Franchise Agreement must be in writing and |
| of Agreement | 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. |
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, the Franchise Agreement mandates an internal dispute resolution process before initiating arbitration. Specifically, if a dispute arises from the Franchise Agreement or any other agreement with Cool Binz, the franchisee must first present the issue to Cool Binz's President. This initial step is intended to facilitate an internal resolution.
Only after exhausting this internal dispute resolution procedure can the franchisee proceed to file a claim with a third party. If the internal process fails to resolve the dispute, the franchisee is then required to submit the matter to binding arbitration. The arbitration will take place in Ann Arbor, Michigan, and will be conducted in accordance with the American Arbitration Association's Commercial Arbitration Rules in effect at that time.
This requirement for internal dispute resolution before arbitration is a fairly common practice in franchising. It aims to provide an opportunity for the franchisor and franchisee to resolve issues amicably and efficiently, potentially avoiding the costs and time associated with formal arbitration or litigation. However, franchisees should be aware of the specific steps and timeframes involved in Cool Binz's internal dispute resolution process to ensure compliance before pursuing further legal action. Franchisees should also be aware that these provisions are subject to state law.