Is a Cool Binz franchisee prohibited from being a shareholder in a competing business under the non-compete agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE III NON-COMPETITION
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- During the Term of the Franchise Agreement. During the term of this Franchise Agreement, you shall not:
- a. Engage as an owner, partner, shareholder, director, officer, employee, consultant, agent, or in any other capacity in any other business offering leasing of portable storage containers, devices and equipment, including, climate-controlled and nonclimate-controlled storage containers, mobile offices, mobile refrigeration units and/or freezers or other services that are the same as or similar to the services sold by the COOL BINZ Business (except for other franchises or authorizations we enter into with you;
- b. Use our Confidential Information, System, COOL BINZ owners' intranet website, Operations Manual, Marks, Customer lists, Customer Information, trade secrets, trade dress, proprietary knowledge, or know-how, or any colorable imitations, in the design, development, or operation of any business other than the COOL BINZ Business franchised hereunder, unless specifically authorized by us; or
- c. Divert or attempt to divert any business or customer of the COOL BINZ Business to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated the Marks or the System.
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- After the Term of the Franchise Agreement. For a period of 18 months from the time of expiration or termination of this Agreement, you and your owners and, if applicable, your Designated General Manager, shall not: (a) engage as an owner, shareholder, partner, director, officer, employee, consultant, salesperson, representative, or agent or in any other capacity in any business offering leasing of portable storage containers, devices and equipment, including, climate-controlled and non-climate-controlled storage containers, mobile offices, mobile refrigeration units and/or freezers, (b) solicit business from Customers
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, franchisees are restricted from engaging in competing businesses during the term of the franchise agreement. Specifically, franchisees are prohibited from acting as an owner, partner, shareholder, director, officer, employee, consultant, or agent in any business that offers leasing of portable storage containers, including climate-controlled and non-climate-controlled units, mobile offices, and refrigeration units. This restriction applies to services that are the same as or similar to those offered by Cool Binz, with the exception of other franchises or authorizations granted by Cool Binz itself.
This non-compete provision ensures that franchisees remain fully committed to the Cool Binz system and do not divert resources or knowledge to competing ventures. It protects Cool Binz's market position and prevents franchisees from using the franchisor's confidential information or business model to benefit a rival company. The restriction extends to preventing franchisees from diverting business or customers away from Cool Binz to any competitor, either directly or indirectly.
After the franchise agreement expires or terminates, a similar non-compete restriction applies for a period of 18 months. During this post-term period, the franchisee, their owners, and any designated general manager are prohibited from engaging in a competing business in any capacity, including as an owner, shareholder, partner, director, officer, employee, consultant, salesperson, representative, or agent. They are also barred from soliciting business from Cool Binz customers during this time. This extended restriction further safeguards Cool Binz's interests by preventing former franchisees from immediately leveraging their experience and knowledge to compete against the franchise system after their agreement ends.