What obligations does a Cool Binz Franchise Owner agree to abide by after transferring the franchise agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
nt form of franchise agreement for a full term, the personal guaranty and all other required exhibits, the terms of which may material differ from the terms of this Agreement;
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- in the case of an installment sale, a transaction where Franchisee provides financing to transferee, transferee pays Franchisee via a promissory note or other structured payment plan, Franchisee must continue to guarantee performance and all payment obligations to Franchisor under this Agreement until the final closing of the installment sale or final payment of such structured payment arrangement;
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- if you finance any part of the sale price of the transferred interest, then (a) you agree and will assure that all of the transferee's obligations under any promissory notes or agreements are subordinate to the transferee's obligation to pay Royalties, Brand Marketing Fees, and other amounts due to us and otherwise to comply with this Agreement, (b) you will not hold any security interest reserved in the business, and (c) you will enter into a comfort letter assuring us that the transferee will meet its obligations under the Franchise Agreement, and reaffirming your guaranty of the Franchise Agreement;
8. you pay us:
- a. our then-current Transfer Fee, as published in our Operations Manual. The Transfer Fee is due upon our preparation of the required transfer documentation (consent to transfer and assignment agreement and/or preparation of transferee's franchise agreement), and is non-refundable at such time;
- b.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, a franchisee who sells their franchise with financing to the buyer (transferee) via a promissory note or structured payment plan has specific ongoing obligations to Cool Binz. The selling franchisee must continue to guarantee the performance and all payment obligations to Cool Binz until the final closing of the installment sale or the final payment of the structured payment arrangement. This means that even after the franchise is sold, the original franchisee remains liable to Cool Binz if the new owner fails to meet their financial or operational responsibilities.
Furthermore, if the franchisee finances any part of the sale, they must ensure that the transferee's obligations to pay royalties, brand marketing fees, and other amounts due to Cool Binz take priority over any promissory notes or agreements between the franchisee and transferee. The franchisee cannot hold any security interest in the business that would jeopardize Cool Binz's financial interests. Additionally, the franchisee must provide a comfort letter to Cool Binz, assuring them that the new owner will meet their obligations under the Franchise Agreement and reaffirming the franchisee's guarantee of the Franchise Agreement.
Finally, the selling franchisee, their principals, and the transferee must sign a general release, in a form satisfactory to Cool Binz, releasing any and all claims against Cool Binz and its affiliates. The franchisee must also affirm and comply with their post-termination obligations as outlined in Sections 6 or 13 of the agreement. These obligations ensure that Cool Binz is protected financially and legally during and after the transfer of ownership, and that the new franchisee is set up for success while adhering to Cool Binz's standards.