What is the purpose of the Equipment Sales and Security Agreement for a Cool Binz franchise?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
the Equipment covering loss, damage, theft, vandalism and casualty; (v) maintain the Equipment per the manufacturer's maintenance, repair and replacement instructions; (vi) maintain in place any notices, labels or other indicia provided by CBI to indicate that the Equipment is subject to this Agreement; (vii) operate the Business as required under the Franchise Agreement; and (viii) notify CBI when any party claims any interest in the Equipment.
- 8. GRANT OF SECURITY INTEREST. In the event Franchisee's purchase of the Equipment sold under the Invoice is financed by CBI, Franchisee hereby grants to CBI a continuing security interest in the Equipment sold to Franchisee, and any additions, accessions, accessories, attachments and replacements of such Equipment, any proceeds and products. The security interest shall continue for the term of this Agreement to secure Franchisee's obligations under this Agreement. Franchisee authorizes CBI to file a financing statement with regards to the Equipment without the necessity of obtaining an additional signature from Franchisee. The rights and remedies of CBI as a secured party under this Agreement and under applicable law are cumulative and non-exclusive. Franchisee agrees to entry for the benefit of CBI by any court of competent jurisdiction without prior notice or the posting of any bond of temporary and permanent injunctions and orders of specific performance to enforce this Agreement or any right or remedy available at law or in equity to CBI.
- 9. TERM, DEFAULT AND TERMINATION. The term of this Agreement shall commence on the effective date set forth above and shall continue in full force and effect until the Franchise Agreement and Promissory Note terminates or expires, and all Equipment is subject to proper disposition as provided herein.
- 10. ADDITIONAL TERMS. No cancellation, modification, amendment, deletion, addition or other change in this Agreement or any provision hereof shall be effective for any purpose unless specifically set forth in a writing signed by both Parties. Neither Party's delay in exercising or such Party's acquiescence in or waiver of a breach of any term, provision or condition of this Agreement, shall be deemed or construed to operate as a waiver of such Party's rights hereunder, except for the specific instance of delay, failure, acquiescence, or waiver. This Agreement shall be executed in one or more counterparts, each of which shall be considered to be an enforceable original instrument. Franchisee shall not assign or delegate, directly or indirectly, its obligations and liabilities under this Agreement, except as part of a permitted transfer in compliance with the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, the Equipment Sales and Security Agreement outlines the terms and conditions related to the purchase, use, and security of equipment used in operating a Cool Binz franchise. Specifically, if Cool Binz finances the franchisee's equipment purchase, the agreement grants Cool Binz a security interest in the equipment, including any additions or proceeds. This security interest ensures that Cool Binz has a claim on the equipment if the franchisee fails to meet their obligations under the agreement. The agreement remains in effect for the duration of the franchise term. Cool Binz is also authorized to file a financing statement without needing an additional signature from the franchisee.
The agreement also places several requirements on the franchisee regarding the equipment. The franchisee must use and maintain the equipment lawfully and in accordance with all applicable laws and regulations. They are responsible for paying all taxes, fees, and charges associated with the equipment, including sales, use, and property taxes. The franchisee must also keep the equipment free of any liens or encumbrances, except for those related to the initial financing with Cool Binz or an approved vendor. Additionally, the franchisee is required to maintain property insurance on the equipment to cover loss, damage, theft, vandalism, and casualty.
Furthermore, the Cool Binz franchisee must adhere to the manufacturer's maintenance, repair, and replacement instructions for the equipment. They must also maintain any notices or labels indicating that the equipment is subject to the agreement. The equipment can only be used for Cool Binz authorized services and within the scope of the Franchise Agreement. Any unauthorized use is considered a breach of the Franchise Agreement, the Promissory Note, and the Equipment Sales and Security Agreement itself. Upon termination or expiration of the Franchise Agreement, the franchisee must cooperate with Cool Binz to repurchase the equipment, or sell the equipment to another Cool Binz franchisee with Cool Binz's consent.
These provisions protect Cool Binz's investment in the equipment and ensure that franchisees properly maintain and use the equipment in accordance with the franchise system's standards. The agreement also restricts the franchisee's ability to transfer ownership of the equipment, ensuring that it remains within the Cool Binz network or is returned to Cool Binz under specific conditions. Prospective franchisees should carefully review this agreement to understand their obligations and the restrictions on equipment usage and ownership.