For how long does the security interest granted to CBI by a Cool Binz franchisee continue?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- **8.
GRANT OF SECURITY INTEREST.** In the event Franchisee's purchase of the Equipment sold under the Invoice is financed by CBI, Franchisee hereby grants to CBI a continuing security interest in the Equipment sold to Franchisee, and any additions, accessions, accessories, attachments and replacements of such Equipment, any proceeds and products.
The security interest shall continue for the term of this Agreement to secure Franchisee's obligations under this Agreement.
Franchisee authorizes CBI to file a financing statement with regards to the Equipment without the necessity of obtaining an additional signature from Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, if a franchisee's purchase of equipment is financed by CBI, the franchisee grants CBI a continuing security interest in the equipment, including any additions, accessories, and proceeds. This security interest serves to secure the franchisee's obligations under the agreement.
Specifically, the security interest remains in effect for the duration of the Franchise Agreement. The document also states that Cool Binz is authorized to file a financing statement regarding the equipment without needing an additional signature from the franchisee.
This means that Cool Binz retains a legal claim on the equipment to ensure the franchisee meets their financial and contractual responsibilities throughout the term of the agreement. For a prospective franchisee, this highlights the importance of understanding all obligations under the Franchise Agreement, as the equipment is collateral that Cool Binz can claim if the franchisee fails to meet those obligations.