What is the internal dispute resolution procedure referenced in the Cool Binz franchise agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
al dispute resolution procedure before you may bring your dispute before a third party. This agreement to first attempt resolution of disputes internally shall survive termination or expiration of this Agreement.
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- Arbitration. At our option, all claims or disputes between us, our shareholders, officers, directors, agents and employees and you, arising out of, or in any way relating to, this Agreement or any other agreement by and between you and us or our affiliates, or any of the parties' respective rights and obligations arising from such agreement, or the operation of the COOL BINZ Business which are not first resolved through the internal dispute resolution procedure set forth in Section 15.F.1 above, must be submitted to binding arbitration in Ann Arbor, Michigan under the auspices of the American Arbitration Association ("AAA"), in accordance with AAA's Commercial Arbitration Rules then in effect, with an arbitrator with at least five (5) years of franchise law experience. We may specifically enforce our rights to arbitration. Each party shall bear its own cost of arbitration and you and we shall share costs of the arbitrator equally. This agreement to arbitrate shall survive any termination or expiration of this Agreement.
- a. Notwithstanding the foregoing, we shall not be required to arbitrate, and may initiate litigation in court, in accordance with the procedure set forth in Section 15 F.3, any controversy, dispute, or claim as set forth in this Section 15.F.2 if such controversy, dispute, or claim concerns an allegation that you have violated (or threaten to violate, or pose an imminent risk of violating):
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- Any federally protected intellectual property rights in the Marks, the System, trade secrets, or Confidential Information;
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- Any claims pertaining to or arising out of any warranty issue;
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- Any of the restrictive covenants contained in this Agreement;
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- Any claims arising out of or related to fraud or misrepresentation by you or your insolvency; or
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- Any claims where the damages alleged are less than $50,000.
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- Selection of Venue.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, disputes that are not first resolved through the internal dispute resolution procedure outlined in Section 15.F.1 of the franchise agreement must be submitted to binding arbitration. This arbitration will take place in Ann Arbor, Michigan, under the rules of the American Arbitration Association (AAA). The arbitrator must have at least five years of experience in franchise law. Cool Binz retains the right to specifically enforce the arbitration agreement.
Both Cool Binz and the franchisee are responsible for their own arbitration costs, and they will equally share the arbitrator's fees. This agreement to arbitrate survives any termination or expiration of the franchise agreement. However, Cool Binz is not required to arbitrate and may pursue litigation in court for disputes involving violations of intellectual property rights, warranty issues, restrictive covenants, fraud, misrepresentation, insolvency, or claims where the alleged damages are less than $50,000.
Cool Binz can also seek immediate relief from a court, such as a writ of attachment or injunction, to protect its interests. This means that while arbitration is the standard process for most disputes, Cool Binz reserves the right to litigate in certain situations, particularly those involving intellectual property or significant financial risk. Franchisees should be aware of these exceptions and understand that not all disputes will necessarily be subject to arbitration.