How does Cordova collect the Royalty fee?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | |
|---|---|---|---|
| Royalty (Notes 2 and 3) | 10% of Gross Sales | Monthly as designated by us | Will be debited automatically from your bank account by ACH or other means designated by us. See, Notes 2 and 3 for Minimum Quarterly Royalty Fee Requirement. |
| Supplemental Royalty (Notes 2 and 3) | Varies depending on satisfaction of Minimum Quarterly Royalty Fee Requirements | On 15th of the month following the end of each calendar year quarter | Will be debited automatically from your bank account by ACH or other means designated by us. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, the Royalty fee, set at 10% of Gross Sales, is collected monthly via automatic debit from the franchisee's bank account through ACH or other designated means. Franchisees are required to sign an ACH Authorization Form, granting Cordova the authority to electronically debit their account for all fees. Cordova also mandates that franchisees deposit all Gross Sales into designated bank accounts subject to ACH authorization and use pre-authorized payment systems.
In addition to the standard Royalty Fee, Cordova also assesses a Supplemental Royalty Fee on a calendar year quarterly basis if the aggregate Royalty Fees paid do not meet the Minimum Quarterly Royalty Fee Requirement. The Minimum Quarterly Royalty Fee varies based on the number of territories in the Operating Territory, with specific dollar amounts set for each year of operation. This Supplemental Royalty Fee is calculated as the difference between the Minimum Quarterly Royalty Fee Requirement and the actual Royalty Fees paid during the quarter and is also debited automatically from the franchisee's bank account.
If any federal, state, or local tax is imposed on the Royalty Fee that Cordova cannot directly offset, the franchisee must compensate Cordova to ensure the net Royalty Fees received are not less than 10% of Gross Sales or the applicable Minimum Quarterly Royalty Fee Requirement, whichever is greater. Franchisees are also responsible for covering all service charges and fees imposed by their bank for the electronic debiting of their account, ensuring that Cordova receives the full fee amount.