Under the Cool Binz Franchise Agreement, what remedies are franchisees prohibited from obtaining based on alleged fraud, misrepresentation, or deceit by Cool Binz?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for claims arising from your non-payment or underpayment of amounts you owe us under this Agreement, any and all claims arising out of or relating to this Agreement or our relationship with you will be barred unless a judicial proceeding is commenced within one (1) year from the date on which the party asserting the claim knew or should have known of the facts giving rise to the claim. You hereby waive the right to obtain any remedy based on alleged fraud, misrepresentation, or deceit by us, including, without limitation, rescission of this Agreement, in any arbitration, judicial, or other adjudicatory proceeding arising hereunder, except upon a ground expressly provided in this Agreement, or pursuant to any right expressly granted by any applicable statute expressly regulating the sale of franchises, or any regulation or rules promulgated thereunder.
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to the 2025 Cool Binz Franchise Disclosure Document, franchisees waive the right to certain remedies if they allege fraud, misrepresentation, or deceit by Cool Binz. Specifically, franchisees are prohibited from obtaining rescission of the Franchise Agreement in any arbitration, judicial, or other adjudicatory proceeding. This means a franchisee cannot cancel the agreement and be restored to their pre-agreement position based on claims of fraud, misrepresentation, or deceit by Cool Binz.
However, this waiver is not absolute. The prohibition does not apply if the remedy is based on a ground expressly provided in the Franchise Agreement itself. Additionally, the waiver does not affect any right expressly granted by any applicable statute expressly regulating the sale of franchises, or any regulation or rules promulgated thereunder. This suggests that statutory rights related to franchise sales, such as those provided by state franchise laws, may still allow for remedies like rescission, even if the franchisee has waived such rights under the agreement itself.
This limitation on claims is a significant consideration for potential Cool Binz franchisees. It restricts their ability to seek certain legal remedies, specifically rescission, in the event they believe Cool Binz engaged in fraud, misrepresentation, or deceit. Prospective franchisees should carefully consider this limitation and consult with legal counsel to fully understand its implications and how it may affect their rights and options in the future.