Under what circumstances might Cool Binz charge a Non-Compliance Fee?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
plus interest, as well as any applicable broker fees, whether incurred by you or by your predecessor franchisee.
M. NON-COMPLIANCE FEE.
You are not permitted to perform services or advertise outside of your territory, as defined above, "Out-of-Territory Conduct". We have the right to assess our ten-current fine amount for conduct that violates the terms of this Agreement, including but not limited to, Out-of-Territory Conduct, use of unapproved equipment in operating your Business, selling or using unapproved Products or Services in your Business, misuse of the Marks, use of unapproved marketing materials, and other violations of your duties under this Franchise Agreement. We may charge you $5,000 per violation (the "Non-Compliance Fee"), or in the case of Out-of-Territory Conduct, a fine of up to $10,000 per repeated occurrence. We reserve the right to waive the fine if the incident
is deemed accidental. This fee may be in lieu or in connection with default and/or termination of this Franchise Agreement, or any other available remedies hereunder.
**O.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a Non-Compliance Fee may be assessed for violations of the franchise agreement. Specifically, Cool Binz franchisees may incur this fee for Out-of-Territory Conduct, using unapproved equipment, selling or using unapproved products or services, misusing trademarks, using unapproved marketing materials, or other breaches of duty. The standard Non-Compliance Fee is $5,000 per violation. However, for Out-of-Territory Conduct, the fine can reach up to $10,000 for repeated occurrences.
Cool Binz also specifies that franchisees may be charged a Non-Compliance Fee if they locate their business office outside of their designated territory without express written consent from Cool Binz. However, Cool Binz retains the right to waive the fine if the incident warrants it.
This fee is designed to ensure franchisees adhere to the standards and rules set by Cool Binz, protecting the brand's integrity and consistency. Prospective franchisees should carefully review the franchise agreement to understand all potential actions that could trigger a Non-Compliance Fee and factor these potential costs into their financial planning. Understanding these conditions is crucial for maintaining compliance and avoiding unexpected expenses.