Under what condition does a Cool Binz franchisee grant CBI a security interest in the equipment?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- **8.
GRANT OF SECURITY INTEREST.** In the event Franchisee's purchase of the Equipment sold under the Invoice is financed by CBI, Franchisee hereby grants to CBI a continuing security interest in the Equipment sold to Franchisee, and any additions, accessions, accessories, attachments and replacements of such Equipment, any proceeds and products.
The security interest shall continue for the term of this Agreement to secure Franchisee's obligations under this Agreement.
Franchisee authorizes CBI to file a financing statement with regards to the Equipment without the necessity of obtaining an additional signature from Franchisee.
The rights and remedies of CBI as a secured party under this Agreement and under applicable law are cumulative and non-exclusive.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a franchisee grants CBI (presumably Cool Binz International) a security interest in the equipment when CBI finances the franchisee's purchase of the equipment. This security interest covers the equipment sold to the franchisee, including any additions, accessories, attachments, and replacements, as well as any proceeds and products derived from the equipment.
This security interest remains in effect for the duration of the Franchise Agreement, securing the franchisee's obligations under the agreement. Cool Binz is authorized to file a financing statement without needing an additional signature from the franchisee, which simplifies the process for CBI to establish its legal claim to the equipment in case of default.
This arrangement protects Cool Binz's investment in the equipment provided to the franchisee. It ensures that if the franchisee fails to meet their financial obligations, Cool Binz has a legal right to repossess the equipment. The FDD specifies that the rights and remedies available to Cool Binz as a secured party are cumulative and non-exclusive, meaning they can pursue multiple avenues for recovering their assets if necessary. Prospective franchisees should understand the implications of this security interest, especially if they plan to finance their equipment purchase through CBI.