What restrictions apply to a lender's rights and remedies regarding the equipment for a Cool Binz franchise?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of the premises, the mutual promises herein set forth, and for other good and valuable consideration that the parties mutually acknowledge, the parties mutually agree and intend to be legally bound as follows:
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- Franchisee may grant a security interest to Lender in the Equipment and the proceeds, additions, replac
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a franchisee may grant a security interest to a lender in the equipment and its proceeds, additions, and replacements. However, the document does not specify any particular restrictions or limitations on the lender's rights and remedies.
This means that the lender's rights and remedies would generally be governed by the applicable laws and the terms of the security agreement between the franchisee and the lender. Cool Binz retains certain rights regarding the equipment, such as the right of first refusal to purchase it if the franchisee sells it to another franchisee.
Prospective franchisees should carefully review any financing agreements and consult with legal and financial advisors to fully understand the lender's rights and remedies and how they might be affected by the franchise agreement. It would be prudent to discuss with Cool Binz what specific lender restrictions or requirements they may have encountered or put in place with other franchisees.