Is a Cool Binz franchisee entitled to compensation for sales made by Cool Binz through Alternative Distribution Channels within their territory?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
thin your Territory.
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.
National or Regional Accounts ("NORAs")
We have the exclusive right to negotiate and enter into agreements or approve forms of agreement to provide services to National or Regional Account ("NORA") customers. The term NORA includes any customer which on its own behalf or through agents, licensees, or other third parties owns, manages, controls or otherwise has responsibility for a business in more than one (1) location, including but not limited to national insurance companies, third-party administrators, and other similar organizations, for the benefit of the System, and regardless of the aggregate contract amount of the services to be performed. Any dispute as to whether a particular customer is a NORA shall be determined by us in our sole discretion and our determination shall be final and binding. Following the execution of a contract with or the acceptance of a bid by a NORA customer which contemplates the provision of services to one (1) or more NORA customers who are located in your Territory, we may, if you are qualified to perform the services and conditioned upon your substantial compliance with the terms of the Agreement and any other applicable agreements, provide you the opportunity to perform such services pursuant to the terms and conditions of the NORA contract or on such terms and conditions as we, at our sole discretion, determine are appropriate. You agree to provide services to all NORA customer referrals within your Territory. You further agree to provide all services in strict adherence to the COOL BINZ performance and process standards and all service guidelines and performance standards of the NORA. You may be required to enter into a service agreement to participate in certain NORA programs.
Source: Item 12 — TERRITORY (FDD pages 45–49)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a franchisee is not entitled to compensation for sales made by Cool Binz through Alternative Distribution Channels within their territory. Cool Binz explicitly reserves the right to sell products under its trademarks within and outside the franchisee's territory through various methods of distribution, which are collectively termed "Alternative Distribution Channels." These channels include the Internet, catalog sales, telemarketing, and other forms of direct marketing sales.
The FDD clearly states that franchisees may not use these Alternative Distribution Channels to solicit, make sales, or accept orders either inside or outside their designated territory. Furthermore, the document emphasizes that franchisees will not receive any compensation for sales that Cool Binz or its affiliates generate through these Alternative Distribution Channels, even if those sales occur within the franchisee's territory. This policy is in place for sales of products using the Cool Binz marks.
Cool Binz also reserves the right to use Alternative Distribution Channels to sell products or services within a franchisee's territory under trademarks different from those used by the franchisee, without providing any compensation to the franchisee. This includes the right to establish, solicit, market to, and build regional and national account relationships, even if the offices for these accounts are located within the franchisee's territory. This lack of compensation for sales through alternative channels is a notable aspect for prospective franchisees to consider.
This policy means that a Cool Binz franchisee's revenue is primarily limited to sales generated through their own efforts within their territory, excluding any sales made through the franchisor's alternative distribution channels. A prospective franchisee should carefully consider the potential impact of this policy on their revenue projections and discuss with Cool Binz the extent to which these alternative channels are utilized within their target market.