What legal rights do I lose upon default of the Cool Binz financing agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Source of Financing | Us | |-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Amount Financed | Up to 50% | | Down Payment | Minimum of 50% | | Term (number of years) | Up to 36 months | | Rate of Interest plus | 9% | | Finance Charge | | | Monthly Payment | Varies depending on amount financed and term. | | Prepayment Penalty | None | | Security Required | Personal Guaranty | | Guaranty | Personal Guaranty | | Liability upon Default | Termination or other loss of Franchise; you must also pay entire amount due and our attorneys' fees and court costs in collecting debt | | Loss of Legal Rights Upon Default | You must waive presentation for payment, demand, notice of non-payment, protest, and all other demands and notices required by law (statutory or otherwise) | If you would like to finance a portion of the Initial Franchise Fee, Initial Package, and the Initial Promotional Package, and you meet our credit standards, you may
Source: Item 10 — FINANCING (FDD pages 35–36)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, if you default on the financing agreement, you waive certain legal rights. Specifically, you must waive presentation for payment, demand, notice of non-payment, protest, and all other demands and notices required by law, whether statutory or otherwise. This means that Cool Binz is not obligated to formally present the payment request, send a demand for payment, notify you of non-payment, or issue a protest if you fail to make payments. You essentially give up your right to receive these standard legal notices.
Furthermore, the Cool Binz FDD states that the promissory note requires you to waive notice of non-payment, protest, and all other demands and notices that may be required by law. This waiver simplifies the process for Cool Binz to pursue collection or other remedies in the event of a default. It is a fairly standard practice for lenders to include such waivers in financing agreements to streamline the collection process and reduce potential legal challenges.
In addition to waiving these legal rights, defaulting on the Cool Binz financing agreement can lead to other significant consequences. Cool Binz can demand immediate payment of the full outstanding balance and may also terminate your Franchise Agreement, although you will receive a ten-day notice to cure the default before termination. You will also be liable for the entire amount due, including Cool Binz's attorneys' fees and court costs incurred in collecting the debt. The promissory note survives termination of the Franchise Agreement, meaning you are still responsible for the debt even if the franchise is terminated.