When does the risk of loss and title to the Cool Binz equipment transfer to the franchisee?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
age, 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.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
The 2025 Cool Binz Franchise Disclosure Document does not explicitly state when the risk of loss and title to the Cool Binz equipment transfers to the franchisee. However, it does state that if Cool Binz finances the franchisee's equipment purchase, the franchisee grants Cool Binz a continuing security interest in the equipment. This security interest covers the equipment itself, any additions or accessories, and any proceeds or products derived from it. Cool Binz is authorized to file a financing statement without requiring an additional signature from the franchisee. This security interest remains in effect for the duration of the Franchise Agreement, securing the franchisee's obligations.
Additionally, the franchisee is responsible for several obligations related to the equipment. These include using and maintaining the equipment lawfully, complying with all applicable laws and regulations, and paying all taxes, fees, and charges associated with the equipment's ownership, possession, or use. The franchisee must also keep the equipment free from liens and encumbrances, except for those related to the initial financing with Cool Binz or an approved vendor. Furthermore, the franchisee is required to obtain and maintain property insurance on the equipment, covering loss, damage, theft, vandalism, and casualty.
Prospective Cool Binz franchisees should clarify with Cool Binz the specific point at which risk of loss and title transfer, as this is a crucial aspect of equipment ownership and liability. Understanding these details will help franchisees manage their responsibilities and protect their investment in the Cool Binz franchise.