Under what conditions will a Cinnaholic franchisee remain liable to telephone companies after the transfer of telephone numbers and listings to the franchisor?

According to Cinnaholic's 2025 Franchise Disclosure Document, even after a franchisee transfers their telephone numbers and listings to Cinnaholic, they may still be liable to the telephone companies under specific conditions. This liability persists for any sums the franchisee was obligated to pay the telephone companies before Cinnaholic formally accepted the transfer of interest.

This means that if a Cinnaholic franchisee has outstanding bills or payment obligations to the telephone company at the time of the transfer, they remain responsible for those debts. This is a standard practice in business transfers, ensuring that existing financial obligations are not erased simply by transferring assets or listings to another party. The franchisee's liability also extends to any other obligations not subject to the Franchise Agreement or the Telephone Listing Agreement.

For a prospective Cinnaholic franchisee, this clause highlights the importance of maintaining good financial standing with all service providers, including telephone companies. Before transferring the franchise or terminating the agreement, it is crucial to settle all outstanding accounts to avoid future liabilities. This also underscores the need to carefully review all contracts with third-party providers to understand the full scope of financial responsibilities and potential liabilities.