Does Cool Binz include payments for terminating a lease when calculating lease liabilities?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
A. PAYMENT OF AMOUNTS OWED TO US.
You must pay to us, on the effective date of termination or expiration of this Agreement, or at any later date that the amounts due to us are determined:
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- all Royalties, promissory note balance(s), Late Report Fees, Late Payment Fees, NSF Fees, Interest Fees, or any other fees, amounts or interest owed to us; and
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- upon termination for any default, the actual and consequential damages, costs, and expenses (including reasonable attorneys' and experts' fees) incurred by us as a result of your default.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
Based on the 2025 Cool Binz Franchise Disclosure Document, the franchisor outlines various financial obligations a franchisee may incur upon termination of the franchise agreement. These obligations primarily relate to unpaid royalties, fees, and damages resulting from the franchisee's default. However, the FDD does not explicitly state whether payments for terminating a lease are included when calculating lease liabilities. Instead, it focuses on liquidated damages and other amounts owed to the franchisor.
Specifically, the FDD states that upon termination due to default, the franchisee is responsible for actual and consequential damages, costs, and expenses, including reasonable attorney's fees, incurred by Cool Binz as a result of the default. Additionally, if the agreement is terminated, the franchisee may be required to pay liquidated damages, calculated based on past royalty fees. These financial repercussions highlight the importance of adhering to the franchise agreement and fulfilling all obligations to avoid potential termination and associated costs.
Since the Cool Binz FDD does not provide explicit details on whether lease termination payments are included in lease liabilities, prospective franchisees should seek clarification from the franchisor regarding this matter. Understanding the full scope of financial responsibilities upon termination, including potential lease-related expenses, is crucial for making an informed investment decision. Franchisees should also consult with a business advisor to fully understand the potential financial implications of the franchise agreement.