Are Cool Binz transfer fees always collectable?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event you were awarded your COOL BINZ Business as a result of your purchase of all or substantially all of the assets of the COOL BINZ Business owned by a previous franchisee in the Territory, you must pay us the following fees if they are not timely paid by your predecessor, or negotiated in your purchase agreement:
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- Our then-current Transfer Fee to defray expenses we incur in the transfer; and
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- Any and all outstanding Royalties, amounts owed for purchases from us, Late Payment Fees, Late Report Fees, Interest Fees, NSF Fees and any other fees owed, plus interest, as well as any applicable broker fees, whether incurred by you or by your predecessor franchisee.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, transfer fees are not always collectable. Specifically, if a new Cool Binz franchisee purchases the assets of a previous franchisee, the new franchisee is responsible for paying Cool Binz's then-current transfer fee only if the predecessor franchisee does not pay it on time or if it is not negotiated in the purchase agreement. This means that the responsibility for the transfer fee can shift depending on the agreement between the outgoing and incoming franchisees.
This arrangement has implications for both the seller and the buyer in a Cool Binz franchise transfer. The seller may need to ensure all fees, including the transfer fee, are paid to Cool Binz before the sale is finalized, or negotiate with the buyer to cover these costs. The buyer needs to verify whether these fees are outstanding and factor them into the purchase price.
It is important for prospective Cool Binz franchisees to understand the conditions under which they might be responsible for a predecessor's outstanding fees. This situation is not uncommon in franchising, as franchisors often want to ensure all debts are settled during a transfer. A prospective franchisee should seek clarity from Cool Binz regarding any outstanding obligations of the previous franchisee and ensure the purchase agreement clearly addresses these liabilities.