Under what conditions will a Cool Binz franchisee be required to reimburse Cool Binz for the cost of an inspection or audit?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Furthermore, if we conduct an inspection or audit due to your failure to (a) furnish reports, supporting records, or other information as required, (b) furnish these items on a timely basis, (c) to record all Customer payments in the COOL BINZ Software within 48 hours of their receipt, or (d) use the COOL BINZ/Required Software for scheduling or invoicing, or we discover that an understatement of Royalty is greater than 3% for any period reviewed, you must reimburse us for the cost of the inspection and/or audit, including without limitation, the charges of attorneys and independent accountants, the travel, room and board expenses, and compensation of our employees. Further, if an understatement of the Royalty is greater than 3%, you also must pay us an additional penalty fee equal to 10% of the total amount of the understated Gross Sales.
These remedies are in addition to our other remedies and rights under this Agreement and applicable law.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a franchisee may be required to reimburse Cool Binz for the cost of an inspection or audit under specific circumstances. These circumstances arise when the franchisee fails to meet certain operational and reporting requirements.
Specifically, Cool Binz will require reimbursement if the franchisee fails to furnish reports, supporting records, or other required information, or if these items are not provided on time. Additionally, franchisees must record all customer payments in the Cool Binz software within 48 hours of receipt and use the Cool Binz/Required Software for scheduling or invoicing. Failure to comply with these software and reporting standards can trigger a reimbursable inspection or audit.
Furthermore, if an inspection or audit reveals that the franchisee has understated their royalty payments by more than 3% for any reviewed period, the franchisee will be responsible for covering the costs of the inspection or audit. These costs may include charges for attorneys and independent accountants, as well as travel, room and board expenses, and compensation for Cool Binz employees involved in the process. In addition to covering the costs of the inspection or audit, an understatement of royalty payments exceeding 3% also incurs a penalty fee of 10% of the total understated gross sales. These measures are in addition to any other remedies or rights Cool Binz may have under the franchise agreement or applicable law.