Does Cool Binz have the right to approve the dispute resolution procedure submitted by the franchisee?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Before attending the Initial Training and/or upon any change to the legal entity ownership, you must submit to us a corporate resolution, or similar action, which states the name of the corporation or LLC, the legal names of all of the partners or shareholders, the percentage of ownership that each member controls, their place of residence and their agreement to be bound by the terms of the Franchise Agreement. In the case of multiple owners, you must submit a dispute resolution procedure acceptable to us in our sole discretion that states what you will do in the event that there is a conflict between any owners of the franchisee entity. In addition, at all times, the owners who have executed the Franchise Agreement must control 67% of the franchisee entity. The remaining owners must sign a written confidentiality and non-compete agreement in the form we prescribe.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, if the franchisee has multiple owners, they must submit a dispute resolution procedure that is acceptable to Cool Binz. This procedure should outline how conflicts between the owners of the franchisee entity will be resolved. Cool Binz has sole discretion in determining whether the submitted procedure is acceptable.
This requirement ensures that Cool Binz can maintain a stable and predictable relationship with its franchisees, even when the franchisee entity has multiple owners with potentially conflicting interests. By having the right to approve the dispute resolution procedure, Cool Binz can ensure that any internal disputes within the franchisee's ownership structure are resolved in a manner that does not negatively impact the operation of the Cool Binz business or the Cool Binz brand.
For a prospective franchisee with multiple owners, this means they need to carefully consider and document a clear dispute resolution process upfront. This process needs to be presented to Cool Binz for approval, and Cool Binz has the final say on whether it is acceptable. Franchisees should seek legal counsel to draft a comprehensive and fair dispute resolution procedure that aligns with Cool Binz's requirements and protects the interests of all owners.