What is the Cool Binz franchisee's responsibility regarding the use of the equipment by any other party?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- **4.
EQUIPMENT USAGE.** Franchisee agrees not to use the Equipment in any business or manner other than in the conduct of the Business pursuant to the Franchise Agreement.
Franchisee acknowledges that the Equipment is proprietary to the COOL BINZ franchise system.
The Equipment can only be used in connection with COOL BINZ authorized services.
Any usage
contrary to this provision shall be considered to be a breach of the Franchise Agreement, the Promissory Note, and this Agreement.
- 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.
- 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 Cool Binz's 2025 Franchise Disclosure Document, a franchisee is restricted in how the equipment can be used by other parties. The Cool Binz franchisee agrees to use the equipment only for conducting business as outlined in the Franchise Agreement. The equipment is considered proprietary to the Cool Binz franchise system and can only be used for authorized services. Any use of the equipment that violates this provision is considered a breach of the Franchise Agreement, the Promissory Note, and the agreement itself.
The Franchise Agreement places restrictions on reselling the equipment. A Cool Binz franchisee cannot sell, lease, or rent the equipment to another party unless specific conditions are met or Cool Binz provides written permission. The equipment is exclusively for use within the Cool Binz franchise network. A franchisee can only transfer the equipment title by selling it to another Cool Binz franchisee in good standing, subject to Cool Binz's first right of refusal and approval. If Cool Binz financed the equipment, the proceeds must first cover any outstanding balance under the Promissory Note. The franchisee's account with Cool Binz must be current, and the purchasing franchisee cannot have any pending defaults.
Another way a franchisee can transfer equipment title is if they are terminating or not renewing their Franchise Agreement but own another Cool Binz franchise. In this case, the equipment and any associated liabilities can be transferred to the other franchise upon written request. Cool Binz may also repurchase the storage containers (bins), with the repurchase price subject to adjustments based on wear and tear, missing components, or damage. These stipulations ensure that the Cool Binz equipment remains within the authorized franchise network and is used according to the brand's standards.