If a Cool Binz franchisee requests approval of alternative suppliers, is reimbursement for evaluation costs required regardless of approval?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee (Note 1) | Amount | Due Date | Remarks (Note 1) |
|---|---|---|---|
| Indemnification | Actual costs, will vary under circumstances | As incurred | You must reimburse us if we are held liable for claims directly or indirectly arising out of your COOL BINZ Business’s operation. Your obligation to indemnify us will survive the termination or expiration of your Franchise Agreement. |
| Costs and | Actual costs, will vary | As incurred | See Note 7. |
| Attorneys’ Fees | under circumstances | ||
| NORA Fee | None currently assessed; if we manage accounts through a national or regional accounts program you will pay up to 5% of Gross Sales | As incurred | See Note 8, and Section 1F of Franchise Agreement |
| Approval of Alternative Suppliers | Actual costs | As incurred | If you ask us to evaluate alternative suppliers of required purchases, you must reimburse us regardless of whether subsequently approve your request. |
Source: Item 6 — OTHER FEES (FDD pages 19–27)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, if a franchisee requests that Cool Binz evaluate alternative suppliers for required purchases, the franchisee must reimburse Cool Binz for the actual costs incurred during the evaluation process. This reimbursement is required regardless of whether Cool Binz ultimately approves the alternative supplier.
This means that a Cool Binz franchisee will bear the financial risk of having an alternative supplier evaluated. Even if the evaluation is unsuccessful and the franchisee is not permitted to use the proposed supplier, they will still be responsible for covering the costs Cool Binz incurred during the evaluation. These costs are listed as "actual costs" and may vary.
This policy is important for prospective franchisees to consider, as it highlights a potential expense that may arise during the operation of their Cool Binz franchise. Franchisees should carefully weigh the potential benefits of using an alternative supplier against the certainty of having to pay for the evaluation, irrespective of the outcome. It is advisable to discuss with Cool Binz what the typical costs for such an evaluation might be to better prepare for this potential expense.