Does each party bear its own cost of arbitration for Cool Binz?

According to Cool Binz's 2025 Franchise Disclosure Document, in the event of arbitration, each party is responsible for covering their own arbitration costs. However, the costs associated with the arbitrator are to be shared equally between the franchisee and Cool Binz. This agreement to arbitrate remains in effect even after the termination or expiration of the Franchise Agreement.

This arrangement means that a Cool Binz franchisee will need to budget for their legal representation and preparation expenses during arbitration. While splitting the arbitrator's fees reduces the financial burden, it's essential to recognize that arbitration can still be a costly process. Franchisees should factor in potential arbitration expenses when assessing the overall financial viability of the franchise.

However, Cool Binz is not required to arbitrate in certain situations and may initiate litigation in court. These situations include allegations that the franchisee has violated intellectual property rights, warranty issues, restrictive covenants, claims related to fraud or misrepresentation, or claims where the damages alleged are less than $50,000. This could mean that a franchisee might incur additional legal expenses if Cool Binz decides to pursue litigation instead of arbitration in these specific cases.