What is the Cool Binz franchisee covenanting regarding the transfer of title to the equipment?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Cool Binz Franchise Disclosure Document, a franchisee is restricted regarding the transfer of equipment ownership. The franchisee cannot sell, lease, or rent the equipment to another party unless Cool Binz provides written permission or under specific conditions outlined in the Franchise Agreement. The equipment is considered proprietary and is authorized for use only within the Cool Binz franchise network.
The franchisee can transfer title to the equipment in only two specific ways. First, the franchisee can sell the equipment to another Cool Binz franchisee in good standing, provided they agree on a price, Cool Binz has the first right of refusal to purchase the equipment, and Cool Binz approves the transaction. If Cool Binz financed the equipment, the proceeds must first cover any outstanding balance under the Promissory Note. Also, the franchisee's account with Cool Binz must be current, and the purchasing franchisee cannot have any pending defaults with Cool Binz.
Second, if the franchisee is terminating or not renewing their Franchise Agreement but owns another Cool Binz franchise, the equipment and the liability for any remaining amount owed on it can be transferred to that other franchise upon written request. Cool Binz also commits to repurchasing the storage container bins, with the repurchase price adjusted for wear and tear, maintenance, and any missing components. These conditions ensure that Cool Binz maintains control over its proprietary equipment and protects its financial interests.