What warranty does CBI provide regarding the title of the Cool Binz equipment?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- **7.
COVENANTS OF FRANCHISEE.** Franchisee covenants with CBI to (i) use and maintain the Equipment in a lawful manner and so as not to violate any law or regulation of the state, city or other political subdivisions in which Franchisee uses the Equipment; (ii) return, pay and file when due all taxes, fees and similar charges, including without limitation sales or use tax, and ad valorem and personal property taxes, imposed on the ownership, possession or use of the Equipment; (iii) keep the Equipment free and clear of all liens, security interests, claims and encumbrances except for those incurred through the initial financing of the Equipment with CBI or from a vendor approved by CBI; (iv) obtain and maintain property insurance on the Equipment covering loss, damage, theft, vandalism and casualty; (v) maintain the Equipment per the manufacturer's maintenance, repair and replacement instructions; (vi) maintain in place any notices, labels or other indicia provided by CBI to indicate that the Equipment is subject to this Agreement; (vii) operate the Business as required under the Franchise Agreement; and (viii) notify CBI when any party claims any interest in the Equipment.
- **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)
Based on the 2025 Cool Binz Franchise Disclosure Document, there is no explicit warranty provided by CBI (the franchisor) regarding the title of the Cool Binz equipment. However, the document does outline several covenants and obligations related to the equipment's use, maintenance, and ownership.
The franchisee is responsible for using and maintaining the equipment lawfully, adhering to all applicable laws and regulations. They must also handle all taxes, fees, and charges associated with the equipment's ownership, possession, or use. Furthermore, the franchisee is obligated to keep the equipment free and clear of any liens, security interests, claims, or encumbrances, except for those incurred through initial financing with CBI or an approved vendor.
In the event that the franchisee's purchase of the equipment is financed by CBI, the franchisee grants CBI a continuing security interest in the equipment. This security interest secures the franchisee's obligations under the agreement and allows CBI to file a financing statement without requiring an additional signature from the franchisee. These stipulations suggest that Cool Binz retains a vested interest in the equipment, especially if they finance it, but does not explicitly offer a warranty of title. A prospective franchisee should seek clarification from Cool Binz regarding title warranties and potential liabilities related to equipment ownership.