What is the minimum damage amount that must be alleged for Cool Binz to be required to arbitrate a claim?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
ce 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,
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, Cool Binz is not required to arbitrate a claim, and may initiate litigation in court, if the damages alleged are less than $50,000. This means that Cool Binz retains the option to pursue legal action in court rather than arbitration for claims where the alleged damages do not meet this threshold.
For a prospective franchisee, this clause outlines a specific scenario where Cool Binz might choose litigation over arbitration. If a franchisee has a dispute with Cool Binz where the damages are substantial (at least $50,000), the franchisee can expect that Cool Binz may require arbitration. However, if the damages are less than $50,000, Cool Binz maintains the right to litigate the matter in court.
This provision is important for franchisees to understand because litigation and arbitration have different procedures, costs, and levels of formality. Litigation typically involves court filings, discovery, and potentially a trial, while arbitration is generally a more streamlined process handled by a neutral arbitrator. The franchisee should be aware of these differences and consider the potential implications for dispute resolution with Cool Binz.