Which article of the Cordova Franchise Agreement defines 'Royalty Fee'?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
"Royalty and Activity Report" shall have the meaning defined and set forth in Article 5.B. of this Agreement.
"Royalty Fee" shall have the meaning defined and set forth in Article 5.B. of this Agreement.
"Scheduled Opening Date" means the day that occurs 180 days immediately following the Effective Date of this Agreement.
"Spouse" means the legal spouse of an Owner.
"Supplemental Royalty Fees" shall have the meaning defined and set forth in Article 5.B. of this Agreement.
"Supplemental Royalty Fee Due Date" shall have the meaning defined and set forth in Article 5.B. of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 44–195)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, the term "Royalty Fee" is defined in Article 5.B of the Franchise Agreement. Additionally, Article 5.B also defines related terms such as "Minimum Quarterly Royalty Fee Requirement" and "Supplemental Royalty Fee".
Article 5.B outlines that Cordova franchisees must pay a continuing royalty fee, which is non-refundable, throughout the term of the agreement. This royalty fee is equal to 10% of the franchisee's monthly Gross Sales. This is subject to minimum quarterly royalty fee requirements.
Furthermore, if the royalty fees paid by the franchisee during a calendar year quarter do not meet or exceed the Minimum Quarterly Royalty Fee Requirements, the franchisee must pay the difference as a supplemental royalty fee. This ensures that Cordova receives a minimum royalty amount, regardless of the franchisee's sales performance in a given quarter.