How does Cordova determine the supplier evaluation fee?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
Refund and cancellation provisions will be inapplicable to franchises operating under North Dakota Law, North Dakota Century Code Annotated Chapter 51-19, Sections 51-19-01 through 51-19-17. If franchisor elects to cancel this Franchise Agreement, franchisor will be entitled to a reasonable fee for its evaluation of you and related preparatory work performed and expenses actually incurred.
Source: Item 23 — RECEIPTS (FDD pages 44–195)
What This Means (2025 FDD)
Based on the 2025 Cordova Franchise Disclosure Document, the determination of a supplier evaluation fee is not explicitly detailed. However, the document does mention a scenario in which Cordova may charge a fee for evaluation and preparatory work. Specifically, in North Dakota, if Cordova elects to cancel a Franchise Agreement, they are entitled to a reasonable fee to cover the evaluation of the franchisee, the preparatory work performed, and the expenses actually incurred.
This fee is applicable only in the event that Cordova chooses to cancel the franchise agreement. The FDD does not specify a fixed amount or a method for calculating this fee, only stating that it must be reasonable. This leaves the determination of the fee amount to Cordova's discretion, based on the specific circumstances of the evaluation, preparatory work, and incurred expenses.
Prospective franchisees should be aware that while this fee is only applicable in a specific cancellation scenario, the lack of a defined calculation method introduces uncertainty. It would be prudent for potential franchisees to seek clarification from Cordova regarding the factors considered when determining the 'reasonable fee' and to request examples of how this fee has been applied in past situations to better understand the potential financial implications.