factual

Which sections of the Cool Binz Franchise Agreement detail the franchisee's obligations regarding fees?

Cool_Binz Franchise · 2025 FDD

Answer 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. Monthly Gross Sales Requirement
0-12 none
13-24 $9,750
25-36 $10,500
37-48 $12,600
48> $15,375
Name of Fee (Note Amount Due Date Remarks
1) (Note 1)
Broker Fee - Resale If you authorize us to enlist a third-party broker to locate the transferee, there will also be a broker fee, which currently is approximately 10% of the sale price, or $30,000, whichever is higher. Due upon closing of the sale of the COOL BINZ Business Payable only if the third party broker located the transferee. Payable to and imposed and collected by us if a broker fee was paid by us to the third party. Payable to and imposed and collected by the broker if we do not pay a broker fee to the third party. This fee is imposed by the third party broker and thus may be increased periodically by the broker.
Renewal Term Fee Our then-current fee, which is presently, 10% of the then-current Initial Franchise Fee At the time you sign a Franchise Agreement for a renewal term You will sign our then current Franchise Agreement for the renewal term, which may include materially different terms, including the Royalty rate and/or Territory. We may increase this fee by up to 10% each year of the Term.
Renovation, Refurbishing, and Remodeling Fees Actual Costs When incurred We may require you to replace, renew, refurbish, or remodel your leased premises, truck, truck wrap, and equipment to meet our current System Standards and condition requirements at any time during the Term, in our sole discretion, and at your expense. You must maintain all trucks in good working condition at all times. There are no financial limits on this obligation
Late Report Fee $50 per day that a report is late. This fee may increase up to ten percent (10%) each year of the term. Due by automatic debit the Friday (or any day we designate) after the report is late Due for each day a report is late. We may increase this fee by up to 10% each year of the Term.
Name of Fee (Note 1) Amount Due Date Remarks (Note 1)
----------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Late Payment Fee $50, or 5% per week, Due by automatic Due for any payment that is
whichever is greater debit on the Friday (or not paid when due.
This fee may increase up any day we designate) We may
to ten percent (10%) each following the due date increase this fee by up to
year of the term. for each late payment 10% each year of the Term.
Administrative Fee Our then-current fee, which is presently $500 per transaction. This fee may increase up to ten percent (10%) each year of the term. As incurred Due upon your request to amend the Franchise Agreement; when we must review and provide written consent to transactions or to services, for which a specific fee is not imposed elsewhere in this agreement or in the System Standards. We may increase this fee by up to 10% each year of the Term.
Collection Fee Our then-current fee, which is presently up to 35% of gross amounts collected on your behalf. This fee may increase up to ten percent (10%) each year of the term. As incurred Due when we collect payment on your behalf for customers who are delinquent in their payment of 90 days or more. We may increase this fee by up to 2% each year of the Term.
Management Fee Our then-current fee, which is presently up to 10% of Gross Sales As incurred Due if and when we step in to manage your Franchised Business. We may increase this fee by up to 1% each year of the Term.
Non-Sufficient Funds (NSF) Fee Our then current fee, which is presently $50 per NSF This fee may increase up to ten percent (10%) each year of the term. Due by automatic debit the Friday after the NSF occurs Due if and when we debit your account for monies owed and there are insufficient funds available.
Convention Non Attendance Fee Our then current fee, which is presently $1,000 Due to us if you fail to attend the Convention and did not receive our prior written permission. See Note 6
Name of Fee (Note 1) Amount Due Date Remarks (Note 1)
------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Non-Compliance Fee Our then-current fee, which is presently up to $10,000 for each incident of Out-of Territory Conduct, or $5,000 per instance for other non-compliant acts or omissions. Due by automatic debit 30 days after written notice You may not establish an office, advertise, solicit, or market in any way to customers or customer service locations outside of your Territory. If you do so you must pay us this fee. This fee is in addition to, and not in lieu of any other rights we have under the Agreement. We may increase this fee by up to 10% each year of the Term.
Audit/Survey Fee Due only if an inspection is necessary. Cost of inspection or audit, plus 100% of understated Royalty and interest, at the rate of 18% per annum or the maximum rate permitted by applicable law, whichever is greater, and all late fees, from the date originally due until the date of payment; if an understatement of Royalty is greater than 3%, you also must pay us an additional penalty fee equal to 10% of the total amount of the understated Gross Sales. In the case of a Survey, our costs of the survey. Due by automatic debit 15 days after billing Due if an inspection or audit is made necessary by your failure to (a) furnish reports, supporting records, or other information as required, (b) furnish these items on a timely basis, (c) use the COOL BINZ /Required Software for scheduling and invoicing, or if an understatement of Royalty is greater than 3% for any period reviewed. In the case of a survey, due if the results of the Survey fall less than the established standard.
Insurance Cost of insurance; If you fail to maintain the required insurance, we have the right to procure insurance on your behalf and you must pay us, on demand, for the costs and premiums we incur. As invoiced You are required to maintain the types and amounts of insurance specified in Item 8 and, as more detailed, the Franchise Agreement.
Interest Fee 18% per annum or the maximum permitted by law Due by automatic debit each Friday Due on all overdue amounts from the date the amounts were originally due.

Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 34–35)

What This Means (2025 FDD)

According to Cool Binz's 2025 Franchise Disclosure Document, Item 6 outlines various fees franchisees may be obligated to pay. These fees cover a range of circumstances, from indemnification and legal costs to specific situations like managing accounts through a national program (NORA Fee) or requiring assistance in reselling the franchise (Broker Fee - Resale). The agreement also addresses ongoing fees such as Renewal Term Fees, Renovation/Refurbishing Fees, and penalties for late reports or payments.

Several fees are based on actual costs incurred by Cool Binz, while others are fixed amounts that may increase over time. For instance, the Late Report Fee is $50 per day, and the Late Payment Fee is $50 or 5% per week, whichever is greater, with potential annual increases of up to 10%. Similarly, fees like the Administrative Fee, Collection Fee, and Management Fee are based on a percentage of transactions or gross sales and can also increase annually. Other fees, such as the Non-Sufficient Funds (NSF) Fee and Convention Non-Attendance Fee, are triggered by specific franchisee actions or inactions.

Cool Binz franchisees should also be aware of fees related to compliance and audits. The Non-Compliance Fee can reach up to $10,000 for out-of-territory conduct or $5,000 for other violations. An Audit/Survey Fee may be imposed if an inspection is necessary due to the franchisee's failure to provide accurate or timely reports, or if royalty understatements exceed 3%. Additionally, franchisees are responsible for maintaining required insurance coverage, and Cool Binz may procure insurance on their behalf if they fail to do so, with the franchisee obligated to cover the costs and premiums. An Interest Fee of 18% per annum, or the maximum permitted by law, is applied to overdue amounts.

Prospective Cool Binz franchisees should carefully review Item 6 in conjunction with the referenced sections of the Franchise Agreement to fully understand their financial obligations and the circumstances under which these fees may be incurred. Understanding these fee structures is crucial for budgeting and managing the financial aspects of operating a Cool Binz franchise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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