Under the Cool Binz agreement, can the Franchisor be held liable for lost profits?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
We are not liable for any direct, incidental, or consequential damages, including but not limited to, lost profits, lost savings or consequential, punitive or incidental damages for any reason whatsoever, including but not limited to any cause arising out of or in any way connected to a technology related problem, such as high speed internet connection, electronic mail, software, website, computer, phone systems and other electronic equipment, or call center, or software-asa-service or other required online platforms or applications (i.e. Google MyBusiness and other internet profiles).
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, Cool Binz is not liable for any direct, incidental, or consequential damages, including lost profits. This protection extends to issues arising from technology-related problems. These problems could include issues with high-speed internet connections, email, software, websites, computers, phone systems, electronic equipment, call centers, or required online platforms like Google MyBusiness.
This means that if a Cool Binz franchisee experiences lost profits due to a technology failure within the systems Cool Binz provides or requires, the franchisee will likely not be able to recover those losses from Cool Binz. This is a fairly standard clause in franchise agreements, as franchisors often rely on technology to deliver their services and want to protect themselves from liability for failures beyond their direct control.
However, it's important to note that this limitation of liability may not extend to all situations. For example, if the lost profits are due to Cool Binz's direct negligence or a breach of contract unrelated to technology, this clause might not apply. Franchisees should carefully review the circumstances surrounding any loss of profits and consult with legal counsel to determine their rights and options.