What is the maximum Non-Compliance Fee Cool Binz can charge for repeated Out-of-Territory Conduct?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
ny applicable broker fees, whether incurred by you or by your predecessor franchisee.
M. NON-COMPLIANCE FEE.
You are not permitted to perform services or advertise outside of your territory, as defined above, "Out-of-Territory Conduct". We have the right to assess our ten-current fine amount for conduct that violates the terms of this Agreement, including but not limited to, Out-of-Territory Conduct, use of unapproved equipment in operating your Business, selling or using unapproved Products or Services in your Business, misuse of the Marks, use of unapproved marketing materials, and other violations of your duties under this Franchise Agreement. We may charge you $5,000 per violation (the "Non-Compliance Fee"), or in the case of Out-of-Territ
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, franchisees are not permitted to perform services or advertise outside of their designated territory, which is referred to as "Out-of-Territory Conduct." Cool Binz has the right to impose a Non-Compliance Fee for violations of the franchise agreement terms, including Out-of-Territory Conduct.
For a single violation, Cool Binz may charge a Non-Compliance Fee of $5,000. However, in the specific case of repeated Out-of-Territory Conduct, Cool Binz has the right to charge a fine of up to $10,000 per repeated occurrence. This means that if a franchisee repeatedly engages in activities outside their territory, they could face a significantly higher penalty compared to other types of non-compliance.
It is important to note that Cool Binz retains the right to waive the fine if the incident warrants it. This provides some flexibility in enforcement, but franchisees should still be aware of the potential financial consequences of operating outside their designated territory. Franchisees should ensure they understand the defined territory and adhere to the restrictions to avoid these fees.