What is the fee for Cordova franchisees with 5 territories in year 2?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
e with the following schedule:
| Total | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Years 7 to 10 |
|---|---|---|---|---|---|---|---|
| Territories | |||||||
| 1 | $5,000 | $7,500 | $12,500 | $20,000 | $50,000 | $75,000 | $100,000 |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, franchisees operating with 5 territories will have a minimum quarterly royalty fee requirement of $37,500 in their second year of operation. This fee is a component of the overall royalty structure, designed to ensure a baseline contribution to Cordova, irrespective of immediate sales performance.
The minimum quarterly royalty fee requirement is a key financial obligation for Cordova franchisees. It functions as a safety net for Cordova, guaranteeing a certain level of income. If a franchisee's gross sales do not generate sufficient royalties to meet this minimum, the franchisee must pay the difference as a supplemental royalty fee.
This requirement has significant implications for franchisees, particularly in the early stages of operation. Franchisees need to carefully project their sales and manage their finances to ensure they can meet this quarterly obligation. Failure to do so can result in additional fees and financial strain. The minimum quarterly royalty fee requirement for franchisees with 5 territories increases to $62,500 in year 3, $100,000 in year 4, $200,000 in year 5, $350,000 in year 6, and $500,000 in years 7 to 10.