Can a Cool Binz franchisee 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 Cool Binz's 2025 Franchise Disclosure Document, franchisees are explicitly restricted from using alternative distribution channels to solicit or make sales, either inside or outside their designated territory. These alternative channels include methods such as the Internet, catalog sales, telemarketing, or other forms of direct marketing. This restriction means a franchisee must primarily rely on traditional sales methods within their territory.
Cool Binz and its affiliates retain the right to use these alternative distribution channels to make sales within a franchisee's territory. However, Cool Binz can only do so using trademarks different from those the franchisee uses under their agreement. The franchisee will not receive any compensation for sales made by Cool Binz through these alternative channels. This could potentially impact a franchisee's revenue if Cool Binz leverages these channels extensively within the franchisee's territory.
This policy is fairly common in franchising, where franchisors often reserve certain sales channels for themselves to manage national accounts or online sales. However, it's crucial for a prospective Cool Binz franchisee to understand the extent to which Cool Binz intends to utilize these alternative channels within their territory, as it could affect their sales potential. Franchisees should also inquire about any potential future plans Cool Binz may have to operate or franchise a business under a different trademark that offers similar goods and services, as this could introduce additional competition.