Regarding Baya Bar, will the franchisee remain liable to Internet and Telephone Companies after transferring interests to the franchisor?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2.6 Cessation of Obligations. After the Internet Companies and the Telephone Companies have duly transferred all Franchisee's interests as described in paragraph 2.3 above to Franchisor, as between Franchisee and Franchisor, Franchisee will have no further interest in, or obligations with respect to the particular Electronic Advertising and/or Telephone Listing. Notwithstanding the foregoing, Franchisee will remain liable to each and all of the Internet Companies and Telephone Companies for the respective sums Franchisee is obligated to pay to them for obligations Franchisee incurred before the date Franchisor duly accepted the transfer of such interests, or for any other obligations not subject to the Franchise Agreement or this Agreement.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a franchisee remains liable to Internet and Telephone Companies for obligations incurred before the transfer of interests to the franchisor. Specifically, after the franchisee transfers all interests in electronic advertising and telephone listings to Baya Bar, the franchisee will have no further interest in or obligations with respect to that advertising or those listings, as between the franchisee and Baya Bar.
However, the franchisee remains responsible for paying any sums owed to Internet and Telephone Companies for obligations incurred before Baya Bar accepted the transfer. This means that if a franchisee has outstanding bills or contracts with these companies prior to the transfer, they are still legally obligated to fulfill those financial commitments.
This provision protects the Internet and Telephone Companies, ensuring they receive payment for services rendered. It also clarifies the division of responsibility between the franchisee and Baya Bar after the franchise agreement terminates. A prospective Baya Bar franchisee should carefully review their existing contracts with these companies and ensure all outstanding balances are settled before transferring their interests to avoid future liabilities.