Is purchasing supplies from an unapproved supplier a cause for termination of the Cool Binz franchise agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
ummary**
Provisions Section in
| Provisions | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| or any other lien is placed against you and not released or bonded within 30 days; (xx) you become insolvent; (xxi) you order or purchase supplies, signs, furnishings, fixtures, equipment or inventory from an unapproved supplier; (xxii) you misuse or make unauthorized use of any COOL BINZ /Required Software; (xxiii) you fail to comply with the anti-terrorism provision; (xxiv) you take for your own personal use any assets or property of the COOL BINZ Business; or (xxv) if there are insufficient funds in your bank account to cover a check or EFT payment 3 or more times within any 12-month period or you fail to achieve minimum sales for 3 consecutive months. These provisions are subject to state law. | |||
| i. | Franchisee's obligations on termination/no n-renewal | Section 13 | Upon termination or early expiration of the Franchise Agreement, your obligations include: (i) pay all amounts owed to us; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–58)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, purchasing supplies from an unapproved supplier can lead to the termination of the franchise agreement. The FDD outlines various provisions related to termination, and specifically states that if a franchisee orders or purchases supplies, signs, furnishings, fixtures, equipment, or inventory from an unapproved supplier, it can be a cause for termination.
This provision is included in Section 13 of the Franchise Agreement, as summarized in Item 17 of the FDD. It is important for prospective Cool Binz franchisees to understand that adhering to the approved supplier list is not merely a suggestion, but a strict requirement. Failure to comply can have serious consequences, including the loss of their franchise.
This type of provision is relatively common in franchising, as franchisors want to maintain quality control and brand consistency across all franchise locations. By mandating the use of approved suppliers, Cool Binz aims to ensure that all franchisees are using products and equipment that meet the company's standards. Franchisees should carefully review the list of approved suppliers and understand the process for requesting approval of new suppliers if needed.