Who is the guarantor for Cool Binz's franchise obligations?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
nt form of franchise agreement for a full term, the personal guaranty and all other required exhibits, the terms of which may material differ from the terms of this Agreement;
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- in the case of an installment sale, a transaction where Franchisee provides financing to transferee, transferee pays Franchisee via a promissory note or other structured payment plan, Franchisee must continue to guarantee performance and all payment obligations to Franchisor under this Agreement until the final closing of the installment sale or final payment of such structured payment arrangement;
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- if you finance any part of the sale price of the transferred interest, then (a) you agree and will assure that all of the transferee's obligations under any promissory notes or agreements are subordinate to the transferee's obligation to pay Royalties, Brand Marketing Fees, and other amounts due to us and otherwise to comply with this Agreement, (b) you will not hold any security interest reserved in the business, and (c) you will enter into a comfort letter assuring us that the transferee will meet its obligations under the Franchise Agreement, and reaffirming your guaranty of the Franchise Agreement;
8. you pay us:
- a. our then-current Transfer Fee, as published in our Operations Manual.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, in the event of an installment sale where the franchisee provides financing to a transferee, the franchisee must continue to guarantee performance and all payment obligations to Cool Binz until the final closing of the installment sale or final payment of such structured payment arrangement.
Additionally, if the franchisee finances any part of the sale price of the transferred interest, they agree to assure that all of the transferee's obligations under any promissory notes or agreements are subordinate to the transferee's obligation to pay royalties, brand marketing fees, and other amounts due to Cool Binz. The franchisee will not hold any security interest reserved in the business and will enter into a comfort letter assuring Cool Binz that the transferee will meet its obligations under the Franchise Agreement, reaffirming the franchisee's guaranty of the Franchise Agreement.
In the event of an approved transfer to a wholly owned corporation or limited liability company, Cool Binz will require the franchisee to own and control at least 67% of the issued and outstanding capital stock or other ownership interest.