What is a Cool Binz prospective franchisee encouraged to do regarding the applicability of California and federal laws to venue restrictions?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisor has completed its pre-opening obligations under the franchise agreement."
No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
ADDITIONAL DISCLOSURES FOR THE STATE OF WASHINGTON
- In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
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- RCW 19.100.180 may supersede the Franchise Agreement in your relationship with the Franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the Franchise Agreement in your relationship with the Franchisor including the areas of termination and renewal of your franchise.
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- Item 6 of the FDD shall be amended to state: "The Technology Fee, Software Fee, Transfer Fee, Broker Fee – Resale, Renewal Term Fee, Late Report Fee, Late Payment Fee, Administrative Fee, Collection Fee, Management Fee, Non-Sufficient Funds (NSF) Fee, Convention Non-Attendance Fee, and Non-Compliance Fee may increase during the Term of the Franchise Agreement. The formula for increasing such fees will be the actual cost of the product or service to Franchisor, plus up to 10% of the fee at the time of execution, each year of the Term. For the avoidance of doubt, if the fee at the time of execution is $500.00, then the increase in year 2 could be up to the actual cost to Franchisor, plus $100.00."
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- Item 17(c) of the FDD is amended to state: "Signing a general release is not a condition to renewal" and Item 17(m) of the FDD is amended to state: "Signing a general release is not a condition to transfer."
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- Item 17(r) of the FDD is amended to state that the post-termination covenants against competition shall be modified to 25 miles.
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- In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
Based on the 2025 Cool Binz Franchise Disclosure Document, there are no specific mentions or additional disclosures for the state of California regarding the applicability of California and federal laws to venue restrictions. The document does, however, provide additional disclosures for franchisees in the states of Washington, Virginia, North Dakota, and Rhode Island. These disclosures address issues such as conflicts of law, the enforcement of non-compete agreements, and stipulations that may supersede the standard franchise agreement.
For example, the FDD states that in Washington, the Washington Franchise Investment Protection Act will prevail in the event of a conflict of laws. For North Dakota franchisees, covenants not to compete are generally considered unenforceable, and franchisees shall not be required to consent to jurisdiction of courts outside of North Dakota. Rhode Island disclosures state that a provision in a Franchise Agreement restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the Rhode Island Franchise Investment Act.
Because the Cool Binz FDD does not provide specific guidance for California franchisees on the applicability of California and federal laws to venue restrictions, prospective franchisees in California should seek legal counsel to understand how these laws may affect their franchise agreement. It would be prudent to discuss venue restrictions and applicable laws with the franchisor directly to gain clarity on how these issues are handled in California.