For Cordova's approval of a transfer, must the franchisee and their Owners not be in default of all agreements with Cordova?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. | Franchisee's obligations on termination/non-renewal | 6, 17 | You must: pay all sums that you owe to us under the Franchise Agreement and all other agreements with us; cease owning and operating the Franchised Business; cease representing yourself as a franchisee of ours; permanently cease using and/or accessing the System, the Licensed Marks, our confidential information, the Manuals, the Business Management System, the Business Management System Data, and the System Supplies; return the Manuals and all confidential information to us in the original form provided to you and document the destruction of all electronic files related to same; completely de-identify the location and/or facility associated with the Franchised Business; as requested by us, transfer to us all data, telephone listings, digital media, accounts, web listings and websites associated with the Franchised Business; and abide by the post-termination non competition covenants and restrictions. |
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| j. | Assignment of the contract by franchisor | 14.A. | No restriction on our right to assign. |
| k. | "Transfer" by franchisee definition | 14.B. | A transfer means and includes, whether voluntary or involuntary, conditional or unconditional, direct or indirect: (a) an assignment, sale, gift, transfer, pledge or sub-franchise; (b) the grant of a mortgage, charge, lien or security interest, including, without limitation, the grant of a collateral assignment; (c) a merger, consolidation, exchange of shares or other ownership interests, issuance of additional ownership interests or securities representing or potentially representing ownership interests, or redemption of ownership interests; and (d) a sale or exchange of voting interests or securities convertible to voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any holder of ownership interests or to control the operations or affairs of Franchisee. |
| l. | Franchisor's approval of transfer by franchisee | 14.B. | Transfers require our prior written consent, which may be granted or withheld in our discretion. |
| m. | Conditions for franchisor's approval of transfer | 14.C. | For approval of your transfer, you must provide us with 30 days prior written notice of the proposed transfer; you and your Owners must not have defaulted in your obligations under the Franchise Agreement and all other agreements with us; you and your Owners must be in compliance with your obligations under the Franchise Agreement and all other agreements with us; the transferee must agree to be bound by all of the terms and provisions of the Franchise Agreement; the transferee's owners and their spouses must personally guarantee all of the terms and provisions of the Franchise Agreement; you and your Owners and their spouses must sign a general release in favor of us; the transfer must provide for the assignment and/or ownership of the approved location for the Franchised Business, and the transferee's continued use and occupancy of such location throughout the term of the Franchise Agreement; the assets of the Franchised Business must be transferred to the transferee; the transferee and the transferee's owners and managers, at the transferee's expense, must complete our training programs; we |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–37)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, a franchisee and their owners must not be in default of any agreements with Cordova to gain approval for a transfer. Specifically, Item 17 outlines the conditions that must be met for Cordova to approve a transfer of the franchise.
To gain approval for a transfer, the franchisee must provide Cordova with 30 days' prior written notice of the proposed transfer. Additionally, both the franchisee and their owners must be in compliance with all obligations under the Franchise Agreement and any other agreements with Cordova. The transferee must agree to be bound by all the terms and provisions of the Franchise Agreement, and the transferee's owners and their spouses must personally guarantee these terms.
Furthermore, the franchisee, their owners, and their spouses must sign a general release in favor of Cordova. The transfer must also provide for the assignment and/or ownership of the approved location for the Franchised Business, ensuring the transferee's continued use and occupancy of the location throughout the term of the Franchise Agreement. The assets of the Franchised Business must be transferred to the transferee, and the transferee, along with their owners and managers, must complete Cordova's training programs at their own expense.
These conditions ensure that any transfer of the Cordova franchise maintains the integrity and standards of the brand, protecting the interests of both the franchisor and the network of franchisees. Prospective franchisees should carefully review these requirements and ensure they can meet all conditions before considering a transfer.