Who remains liable for all obligations to Cordova after a franchise transfer?

According to Cordova's 2025 Franchise Disclosure Document, even after a franchise is transferred, the original franchisee, their owners, and their spouses remain liable for all obligations to Cordova as outlined in the franchise agreement. This means that if the new franchisee fails to meet their financial or contractual duties, Cordova can still seek recourse from the original franchisee, owners, and spouses.

This provision is significant for prospective Cordova franchisees because it highlights the enduring financial responsibility associated with the franchise agreement. Even after selling the franchise, the original franchisee remains on the hook for the performance of the new franchisee. This could include ongoing royalty fees, advertising contributions, and any other financial obligations specified in the original agreement.

To ensure a clean break from the franchise, a transferring Cordova franchisee should carefully vet potential buyers and negotiate terms that protect them from future liabilities. Additionally, the franchisee, each owner, and each spouse must execute a General Release, releasing Cordova and its affiliates from any and all claims against Cordova for matters arising on, or before, the effective date of the Transfer. Franchisees should seek legal counsel to fully understand the implications of this continued liability and the scope of the general release before proceeding with a transfer.