What is the definition of a 'Franchise Outlet' for a Cordova business?

According to Cordova's 2025 Franchise Disclosure Document, a 'Franchise Outlet' is defined as a Cordova business that is operated under a Franchise Agreement and is not a Company Owned Outlet. This distinction is important because the FDD often presents financial performance data separately for company-owned versus franchised locations, if any franchised locations exist.

Understanding this definition is crucial for prospective franchisees as they evaluate the financial performance representations provided in Item 19 of the FDD. Cordova only provides financial information for a Company Owned Outlet in Omaha, Nebraska. Because Cordova does not have any Franchise Outlets, the financial performance of the Company Owned Outlet may not be representative of what a franchisee can expect to achieve.

It is important to note that the financial performance of a Company Owned Outlet may differ significantly from that of a Franchise Outlet due to factors such as managerial skill, brand recognition in the local market, and the absence of ongoing fees like Royalty Fees and Brand Development Fund Fees that a franchisee would be required to pay. Therefore, prospective franchisees should carefully consider these differences when reviewing the financial performance data provided in the FDD and conduct their own due diligence to assess the potential financial performance of a Cordova franchise.