What happens if the Cool Binz transferee does not meet the franchisor's standards and qualifications?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
A. BY US.
This Agreement is fully transferable by us and will inure to the benefit of any transferee or other legal successor to our interests herein.
B. BY YOU.
You acknowledge and agree that we have entered into this Agreement with you based on your personal qualifications, experience, skills, character, etc. Thus, you cannot transfer this Agreement. "Transfer" shall mean any voluntary, involuntary, direct, or indirect, in whole or in part, assignment, sale, gift, encumbrance, lease, merger, bequest, change in control, or other disposition of 1) this Agreement or any rights thereunder, 2) the COOL BINZ Business or its assets, 3) any part of your ownership interest in the assets of the COOL BINZ Business , or 4) any part of your equity/ownership interest in the Franchisee entity, or a grant of an option, warrant or right to acquire an equity or ownership interest, including but not limited to by divorce, insolvency, probate or intestate succession, trust, or other operation of law. All Transfers require our prior written approval and are subject to the conditions below. Any such Transfer without our prior written approval will be void and will constitute a breach of this Agreement. We will not, however, unreasonably withhold our approval provided that the conditions specified below are met, which we will determine in our sole discretion:
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the franchisor acknowledges that they have entered into the agreement with the franchisee based on the franchisee's personal qualifications, experience, skills, and character. Therefore, the franchisee cannot transfer the agreement without Cool Binz's prior written approval. Any transfer without this approval will be considered void and a breach of the agreement. Cool Binz will not unreasonably withhold approval if the specified conditions are met, which they will determine in their sole discretion.
One of the conditions for transfer approval is that the transferee must demonstrate sufficient business experience, aptitude, and financial resources to meet Cool Binz's then-current standards and qualifications for new franchisees. This may include aptitude or assessment testing. The FDD does not explicitly state what happens if the transferee fails to meet these qualifications.
However, it can be inferred that if the transferee does not meet Cool Binz's standards, the transfer will not be approved. This means the original franchisee will not be able to transfer their franchise to the proposed transferee. A prospective franchisee should clarify with Cool Binz the specific steps and criteria involved in the transferee approval process and what options the franchisee has if a potential transferee is rejected.