What fees are included in 'Franchise Related Expenses' for a Cordova franchise?

According to Cordova's 2025 Franchise Disclosure Document, 'Franchise Related Expenses' encompass specific fees mandated by the Franchise Agreements. These include Royalty Fees, Brand Development Fund Fees, Technology Fees, and local marketing expenditures. However, the FDD clarifies that this list is not exhaustive, and 'Franchise Related Expenses do not include all fee and payment obligations required under a Franchise Agreement.'

To provide further context, the financial performance representation for the company-owned outlet in Omaha, Nebraska, includes adjustments for select franchise-related expenses. In 2024, these were a Royalty Fee of $1,377,122 (10% of gross sales), a Technology Fee of $4,200, and local marketing expenses of $2,035,583. The Brand Development Fund Fee was not assessed at that time. The Royalty Fee is equal to 10% of Gross Sales, subject to a Minimum Quarterly Royalty Fee Requirement as set forth in Item 6 of this Disclosure Document. The Brand Development Fund Fee is currently not assessed but Cordova reserves the right to collect a Brand Development Fund Fee of up to 2% of Gross Sales. The Technology Fee is currently $350 per month but Cordova reserves the right to increase the Technology Fee to up to $750 per month. On an on-going monthly basis, you must spend not less than $1,000 per Territory per month on the local marketing of your Cordova Business.

Prospective franchisees should note that while the Brand Development Fund Fee was not assessed in 2024, Cordova retains the right to implement this fee, up to 2% of gross sales. Similarly, while the Technology Fee was $350 per month, it could increase to $750 per month. Franchisees are also required to spend at least $1,000 per territory per month on local marketing. It is important to review Item 6 of the FDD to understand the Minimum Quarterly Royalty Fee Requirement. Franchisees should carefully consider these potential expenses when evaluating the financial viability of a Cordova franchise.