Under what conditions will Cool Binz not unreasonably withhold approval for a franchise transfer?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that we have entered into this Agreement with you based on your personal qualifications, experience, skills, character, etc. Thus, you cannot transfer this Agreement. "Transfer" shall mean any voluntary, involuntary, direct, or indirect, in whole or in part, assignment, sale, gift, encumbrance, lease, merger, bequest, change in control, or other disposition of 1) this Agreement or any rights thereunder, 2) the COOL BINZ Business or its assets, 3) any part of your ownership interest in the assets of the COOL BINZ Business , or 4) any part of your equity/ownership interest in the Franchisee entity, or a grant of an option, warrant or right to acquire an equity or ownership interest, including but not limited to by divorce, insolvency, probate or intestate succession, trust, or other operation of law. All Transfers require our prior written approval and are subject to the conditions below. Any such Transfer without our prior written approval will be void and will constitute a breach of this Agreement. We will not, however, unreasonably withhold our approval provided that the conditions specified below are met, which we will determine in our sole discretion:
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- you are in full compliance with this Agreement or any other agreement between you and us, our affiliates, or our designated/approved suppliers and vendors, and you have paid all accrued monetary obligations to us, our affiliates, and our designated/approved suppliers and vendors;
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- the transferee has demonstrated sufficient business experience, aptitude, and financial resources to meet our then-current standards and qualifications for new franchisees, which may include aptitude or assessment testing;
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, Cool Binz acknowledges that they have entered into the Franchise Agreement with the franchisee based on the franchisee's personal qualifications, experience, skills, and character. As such, the franchisee cannot transfer the agreement without prior written approval from Cool Binz. Transfer includes any voluntary, involuntary, direct, or indirect assignment, sale, gift, encumbrance, lease, merger, bequest, or change in control of the agreement, the Cool Binz Business or its assets, or any part of the franchisee's ownership interest. Any transfer without Cool Binz's prior written approval will be void and constitute a breach of the agreement.
Cool Binz will not unreasonably withhold approval for a transfer if certain conditions are met. These conditions, which Cool Binz will determine in its sole discretion, include the franchisee being in full compliance with the Franchise Agreement or any other agreement with Cool Binz, its affiliates, or designated suppliers and vendors, and having paid all accrued monetary obligations to them. Additionally, the transferee must demonstrate sufficient business experience, aptitude, and financial resources to meet Cool Binz's then-current standards and qualifications for new franchisees, which may include aptitude or assessment testing.
These stipulations are typical in franchising, as franchisors want to ensure that any new franchisee taking over a location is well-qualified and will maintain the brand's standards. The requirement for the franchisee to be in full compliance with all agreements and have paid all obligations is also standard, as the franchisor wants to ensure they are not transferring a business with outstanding debts or unresolved issues. Prospective franchisees should carefully review these conditions and ensure they can meet them before attempting to transfer their franchise.