Following the transfer of internet interests to Cinnaholic, for what financial obligations to the Internet Companies does the franchisee remain liable?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.5 Cessation of Obligations. After the Internet Companies have duly transferred all Franchisee's Interest in such Internet Web Sites and Listings to Franchisor, as between Franchisee and Franchisor, Franchise will have no further interest in, or obligations under, such Internet Web Sites and Listings. Notwithstanding the foregoing, Franchisee will remain liable to each and all of the Internet Companies for the sums Franchisee is obligated to pay such Internet Companies for obligations Franchisee incurred before the date Franchisor duly accepted the transfer of such Interest, or for any other obligations not subject to the Franchise Agreement or this Internet Listing Agreement.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, after a franchisee transfers their internet interests to Cinnaholic, they remain liable to the Internet Companies for specific financial obligations. This liability includes any sums the franchisee was obligated to pay these companies for obligations incurred before Cinnaholic formally accepted the transfer of the internet interests.
In practical terms, this means that if a Cinnaholic franchisee has outstanding bills or payment plans with Internet Service Providers, domain name registries, or search engines for services rendered before the transfer date, they are still responsible for settling those debts. This could include charges for website hosting, domain registration renewals, search engine optimization services, or any other internet-related services the franchisee contracted for.
It is important to note that the franchisee's liability extends only to obligations incurred before the transfer date and for any other obligations not subject to the Franchise Agreement or the Internet Listing Agreement. Any new charges or services initiated after the transfer becomes Cinnaholic's responsibility. Therefore, franchisees should ensure all accounts are up-to-date and any outstanding balances are cleared before the transfer to avoid future financial disputes. Franchisees should also maintain detailed records of all payments and agreements with Internet Companies to provide proof of payment if needed.