Based on the 2025 Franchise Disclosure Document, Cinnaholic's contract liabilities are detailed within the notes to their financial statements. Specifically, the non-refundable franchise fees received but not yet earned as of December 31, 2023, amounted to $3,288,772. Additionally, prepaid commissions that were paid but not expensed totaled $972,229 as of the same date.

These figures represent Cinnaholic's obligations to provide services or fulfill agreements related to these fees and commissions in the future. The deferred revenue from franchise fees indicates the amount Cinnaholic has collected from franchisees for which they have not yet provided the full services or benefits, which will be recognized over the life of the franchise agreement. Similarly, the prepaid commissions represent payments made by Cinnaholic for which the corresponding benefit or service has not yet been fully realized.

For a prospective Cinnaholic franchisee, these liabilities reflect the financial obligations Cinnaholic has to its existing franchisees and other parties. Understanding the magnitude and nature of these liabilities can provide insight into Cinnaholic's financial health and its ongoing commitments. It's important to note that these contract liabilities are a normal part of franchise operations, as franchise fees are typically recognized over the term of the franchise agreement rather than immediately upon receipt.