How are the 'then-current' fees for a Cool Binz franchise subject to change during the term of the agreement?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
All fees listed as "then-current" fee may change during the term of the Agreement, based on increases in Consumer Price Index, market and industry rates for the specific item, or other factors impacting the sufficiency of the fee to provide the service or product. Because these market conditions are unpredictable, there is no stated range for these fees.
| 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. |
| 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. |
| 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. |
Source: Item 6 — OTHER FEES (FDD pages 19–27)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, several fees are designated as 'then-current' and are subject to change during the term of the Franchise Agreement. These fees can fluctuate based on factors such as increases in the Consumer Price Index, prevailing market and industry rates for specific items, and other conditions that affect the fee's sufficiency to cover the related service or product. The FDD indicates that due to the unpredictable nature of market conditions, there is no stated range for these fees. This means that franchisees should be prepared for potential increases in these fees throughout their agreement term.
Several specific fees are identified as 'then-current' and may increase. For example, the Renewal Term Fee, which is presently 10% of the then-current Initial Franchise Fee, may be increased by Cool Binz by up to 10% each year of the term. Other fees that fall into this category include the Administrative Fee (currently $500 per transaction), the Collection Fee (up to 35% of gross amounts collected), the Management Fee (up to 10% of Gross Sales), and the Non-Sufficient Funds (NSF) Fee (currently $50 per NSF). The Convention Non Attendance Fee is currently $1,000. The Non-Compliance Fee is currently up to $10,000 for each incident of Out-of Territory Conduct, or $5,000 per instance for other non-compliant acts or omissions.
Additionally, the Late Report Fee and Late Payment Fee (both starting at $50) can also increase by up to 10% each year of the term. The Broker Fee for resale, if Cool Binz enlists a third-party broker, is approximately 10% of the sale price or $30,000, whichever is higher, and this fee may be increased periodically by the broker. These incremental increases could impact a franchisee's operating costs and profitability over time. Franchisees should factor in potential fee increases when projecting their financial performance and discuss these potential changes with Cool Binz during their due diligence process.