What security interest does the Cool Binz franchisee grant to CBI to secure payment for the equipment?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- **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.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, if Cool Binz finances the franchisee's equipment purchase, the franchisee grants Cool Binz a continuing security interest in the equipment. This security interest extends to any additions, accessories, attachments, and replacements of the equipment, as well as any proceeds and products derived from it.
This security interest serves as collateral for the franchisee's obligations under the Franchise Agreement and remains in effect for the agreement's duration. Cool Binz is authorized to file a financing statement related to the equipment without needing an additional signature from the franchisee.
The rights and remedies available to Cool Binz as a secured party under the agreement and applicable law are cumulative and non-exclusive, meaning Cool Binz has multiple avenues to protect its interests in case of franchisee default. This arrangement protects Cool Binz's investment in the equipment provided to franchisees and ensures they have a legal claim on the assets if the franchisee fails to meet their financial obligations.