Under what circumstances will the Cool Binz Agreement automatically terminate without notice if the franchisee makes an assignment?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
A. AUTOMATIC TERMINATION WITHOUT NOTICE.
This Agreement will automatically terminate without notice or an opportunity to cure upon the occurrence of any of the following:
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- If you make an assignment for the benefit of creditors, file a voluntary petition in bankruptcy, are adjudicated bankrupt or insolvent, file or acquiesce in the filing of a petition seeking reorganization or arrangement under any federal or state bankruptcy or insolvency law, or consent to or acquiesce in the appointment of a trustee or receiver for you or the COOL BINZ Business.
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- If proceedings are commenced to have you adjudicated bankrupt or to seek your reorganization under any state or federal bankruptcy or insolvency law, and such proceedings are not dismissed within 60 days, or a trustee or receiver is appointed
for you or the COOL BINZ Business without your consent, and the appointment is not vacated within 60 days.
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- You attempt to make an unauthorized transfer of this Agreement or the COOL BINZ Business in violation of any of the transfer provisions contained in Section 10 of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the franchise agreement will automatically terminate without notice if the franchisee makes an assignment for the benefit of creditors. This means that if a franchisee transfers their assets to a third party to satisfy their debts, Cool Binz can immediately terminate the agreement.
Additionally, the agreement will automatically terminate if the franchisee files a voluntary petition in bankruptcy, is adjudicated bankrupt or insolvent, files or acquiesces in the filing of a petition seeking reorganization or arrangement under any federal or state bankruptcy or insolvency law, or consents to or acquiesces in the appointment of a trustee or receiver for the franchisee or the Cool Binz Business. These circumstances all relate to the franchisee's financial instability and inability to manage their debts.
Finally, Cool Binz can automatically terminate the agreement if the franchisee attempts to make an unauthorized transfer of the agreement or the Cool Binz Business in violation of the transfer provisions outlined in Section 10 of the agreement. This provision protects Cool Binz from unapproved transfers that could negatively impact the brand or operations.