What is the relationship between the restrictions on suppliers for Cool Binz (Item 8) and the potential for indemnification fees (Item 6)?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
FEES**
| Name of Fee (Note 1) | Amount | Due Date | Remarks (Note 1) |
|---|---|---|---|
| Indemnification | Actual costs, will vary under circumstances | As incurred | You must reimburse us if we are held liable for claims directly or indirectly arising out of your COOL BINZ Business’s operation. Your obligation to indemnify us will survive the termination or expiration of your Franchise Agreement. |
| Costs and | Actual costs, will vary | As incurred | See Note 7. |
| Attorneys’ Fees | under circumstances | ||
| NORA Fee | None currently assessed; if we manage accounts through a national or regional accounts program you will pay up to 5% of Gross Sales | As incurred | See Note 8, and Section 1F of Franchise Agreement |
| Approval of Alternative Suppliers | Actual costs | As incurred | If you ask us to evaluate alternative suppliers of required purchases, you must reimburse us regardless of whether subsequently approve your request. |
| Month in Operation | Min. |
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, Item 8 outlines restrictions on suppliers, while Item 6 describes potential indemnification fees. Specifically, Cool Binz franchisees are required to purchase the Initial Package, Initial Promotional Package, and Container Assembly and Set Up exclusively from Cool Binz. Cool Binz retains the right to derive revenue from these required purchases. While the document does not explicitly state that using non-approved suppliers will automatically trigger indemnification, it does state that franchisees must operate their Cool Binz business according to the standards, specifications, and operating procedures of the system.
If a Cool Binz franchisee violates the restrictions on approved suppliers and this violation leads to a claim against Cool Binz, the franchisee may be required to indemnify Cool Binz for the costs incurred. The indemnification fee covers actual costs and will vary depending on the circumstances. This obligation to indemnify Cool Binz survives the termination or expiration of the Franchise Agreement.
In practical terms, a Cool Binz franchisee needs to adhere strictly to the approved supplier list to avoid potential quality issues or operational inconsistencies that could lead to customer complaints, legal claims, or other liabilities. By mandating specific suppliers, Cool Binz aims to maintain consistency and quality across all franchise locations, but any deviation from these requirements by a franchisee could result in financial responsibility for any resulting damages or claims through the indemnification clause. Additionally, if a franchisee asks Cool Binz to evaluate alternative suppliers, the franchisee must reimburse Cool Binz for these costs, regardless of whether Cool Binz approves the request.