Under what circumstances is Cool Binz not required to arbitrate and may initiate litigation in court?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
r rights to arbitration. Each party shall bear its own cost of arbitration and you and we shall share costs of the arbitrator equally. This agreement to arbitrate shall survive any termination or expiration of this Agreement.
- a. Notwithstanding the foregoing, we shall not be required to arbitrate, and may initiate litigation in court, in accordance with the procedure set forth in Section 15 F.3, any controversy, dispute, or claim as set forth in this Section 15.F.2 if such controversy, dispute, or claim concerns an allegation that you have violated (or threaten to violate, or pose an imminent risk of violating):
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- Any federally protected intellectual property rights in the Marks, the System, trade secrets, or Confidential Information;
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- Any claims pertaining to or arising out of any warranty issue;
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Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, Cool Binz is not required to arbitrate and may initiate litigation in court under specific circumstances. These circumstances include allegations that the franchisee has violated or threatens to violate federally protected intellectual property rights in the Marks, the System, trade secrets, or Confidential Information.
Additionally, Cool Binz may initiate litigation for claims pertaining to or arising out of any warranty issue, any of the restrictive covenants contained in the Franchise Agreement, or claims arising out of or related to fraud or misrepresentation by the franchisee or their insolvency. Cool Binz can also pursue litigation if the damages alleged are less than $50,000.
This means that while Cool Binz generally prefers arbitration for dispute resolution, it reserves the right to pursue legal action in court to protect its intellectual property, address breaches of contract, or handle cases involving fraud or misrepresentation, especially when the potential damages are relatively small. This approach allows Cool Binz to address certain critical issues more directly and efficiently through the court system.