What is the Cool Binz franchisee's responsibility regarding the resale, leasing, or renting of the equipment to any other party?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5. TRANSFER OF OWNERSHIP. Franchisee acknowledges that the Franchise Agreement imposes restrictions and limitations on the resale of the Equipment. Franchisee acknowledges that the Equipment may not be sold, leased, or rented to or used by any other party, except under the conditions stated below, as provided in the Franchise Agreement, or as permitted in writing by CBI. The Equipment is proprietary and authorized for use only within the COOL BINZ franchise network. 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.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, franchisees face specific restrictions regarding the resale, leasing, or renting of equipment. The Franchise Agreement stipulates that franchisees cannot sell, lease, or rent the equipment to any other party unless explicitly permitted by Cool Binz in writing or under conditions outlined in the Franchise Agreement. This restriction underscores that the equipment remains proprietary to the Cool Binz franchise system and is authorized for use only within the Cool Binz network.
The document outlines two specific scenarios where equipment transfer is permissible. First, a franchisee can sell the equipment to another Cool Binz franchisee in good standing, provided they reach a mutually acceptable price and Cool Binz has the first right of refusal and approves the transaction. If Cool Binz financed any portion of the equipment, the proceeds must first cover any outstanding balance under the Promissory Note. Second, if a franchisee is terminating or not renewing their agreement but owns another Cool Binz franchise, the equipment and associated liabilities can be transferred to that franchise upon written request.
These stipulations ensure that Cool Binz maintains control over its equipment and brand standards. Any unauthorized usage or transfer is considered a breach of the Franchise Agreement, the Promissory Note, and the agreement concerning equipment usage. Franchisees must adhere strictly to these conditions to avoid legal repercussions and maintain compliance within the Cool Binz franchise system.