Is a Cool Binz franchisee allowed to use alternative distribution channels to make sales?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Although we have not done so, we and our affiliates may sell products under the Marks within and outside the Territory through any method of distribution, although within your Territory it may not be through a COOL BINZ Business. This includes sales through such channels of distribution as the Internet, catalog sales, telemarketing, or other direct marketing sales (collectively, the "Alternative Distribution Channels"). You may not use Alternative Distribution Channels to solicit, make sales, or accept orders outside or inside the Territory. You may not receive compensation for our sales through Alternative Distribution Channels.
We and our affiliates may use Alternative Distribution Channels to make sales within the Territory of products or services under trademarks different from the Marks you will use under the Franchise Agreement.
Source: Item 12 — TERRITORY (FDD pages 45–49)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, franchisees are explicitly restricted from using alternative distribution channels to solicit or make sales, whether inside or outside their designated territory. These alternative channels include methods such as the Internet, catalog sales, telemarketing, or other direct marketing sales. This restriction is in place to protect the integrity of the Cool Binz franchise system and to ensure that sales efforts are coordinated and controlled by the company. Franchisees also will not receive compensation for sales that Cool Binz makes through alternative distribution channels.
Cool Binz and its affiliates retain the right to use these alternative distribution channels to make sales within a franchisee's territory, even using trademarks different from those the franchisee uses under their agreement. This means that while franchisees are prohibited from using these channels, Cool Binz itself can leverage them to reach customers, potentially creating competition within the franchisee's own territory.
This policy has significant implications for prospective franchisees. It limits their ability to expand their customer base through online or direct marketing efforts, potentially hindering their growth. Franchisees must rely on traditional methods and the support provided by Cool Binz, while also competing with the company's direct sales efforts within their territory. This setup underscores the importance of understanding the franchisor's sales strategies and how they might impact a franchisee's business.