When is the Cordova audit fee due?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | |
|---|---|---|---|
| Audit | Cost of audit | On demand | For costs incurred by us for each financial audit, provided the audit determines underreporting of 2% or greater during any designated period. Includes expenses incurred by us including audit, legal, travel and reasonable accommodations. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, the audit fee is due 'on demand.' This means that Cordova can request payment for the cost of an audit at any time.
The FDD specifies that Cordova will charge for the costs incurred for each financial audit if the audit determines underreporting of 2% or greater during any designated period. These costs include expenses incurred by Cordova for the audit, legal services, travel, and reasonable accommodations.
This fee is triggered if Cordova suspects financial irregularities and conducts an audit that confirms underreporting of gross sales by the franchisee. It is important to note that the franchisee is responsible for covering not only the direct costs of the audit but also associated legal and travel expenses incurred by Cordova. This could potentially represent a significant, unplanned expense for the franchisee.