Is the Cinnaholic franchisee still liable to Internet Companies after transferring the Internet Web Sites and Listings to the franchisor?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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, a franchisee remains liable to Internet Companies even after transferring Internet Web Sites and Listings to the franchisor. Specifically, after the Internet Companies have transferred all of the franchisee's interest in such websites and listings to Cinnaholic, the franchisee will have no further interest in, or obligations under, such websites and listings as between the franchisee and Cinnaholic.
However, the franchisee remains responsible for any sums they are obligated to pay to the Internet Companies for obligations incurred before the date Cinnaholic accepted the transfer of interest. This also applies to any other obligations not subject to the Franchise Agreement or the Internet Listing Agreement.
In practical terms, this means that if a Cinnaholic franchisee has outstanding bills or contractual obligations with Internet Companies (such as hosting fees or advertising costs) prior to the transfer date, they are still responsible for paying those amounts, regardless of the transfer of the websites and listings to Cinnaholic. Franchisees should ensure all accounts are settled before the transfer to avoid future liabilities.