For a Cordova franchise, is insurance considered a Disclosed Expense?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
- (j) Disclosed Expenses means the following select expenses: rent, utilities, office supplies, marketing, insurance, technology, and administrative and management labor cost.
| Company Owned Outlet: Omaha, Nebraska | ||
|---|---|---|
| Gross Sales and Disclosed Expenses Information | ||
| 2024 Calendar Year | Total $ $ | |
| Less: | ||
| Direct Cost of Goods and Services Sold | ($9,245,725) | 67.1% |
| Less: Disclosed Expenses | ||
| Rent | ($26,400) | 0.2% |
| Utilities | ($9,008) | 0.1% |
| Office Supplies | ($6,000) | 0.0% |
| Marketing | ($44,488) | 0.3% |
| Insurance | ($31,104) | 0.2% |
| Technology | ($52,038) | 0.4% |
| Administrative and Management Labor Cost | ($939,556) | 6.8% |
The financial information was not prepared on a basis consistent with generally accepted accounting principles. Data for our Company Owned Outlet is based on information reported to us by our affiliate. We do not have any Franchise Outlets. The information in this analysis has not been audited, is based on historical financial data, and is not a forecast or projection of future financial performance.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 37–41)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, insurance is considered a Disclosed Expense. The FDD defines "Disclosed Expenses" as select expenses including rent, utilities, office supplies, marketing, insurance, technology, and administrative and management labor cost. This definition is important for prospective franchisees as it outlines which expenses Cordova considers when presenting financial performance representations.
The financial performance representation for the company-owned outlet in Omaha, Nebraska, includes insurance as a Disclosed Expense. In 2024, the insurance expense for this outlet was $31,104, representing 0.2% of gross sales. This provides a benchmark for franchisees to understand the potential scale of insurance costs relative to revenue. However, this figure is based on a company-owned outlet and may not directly translate to a franchised business due to factors like managerial skill, brand recognition, and the absence of royalty and brand development fund fees.
It is important to note that the financial information provided is based on historical data from a company-owned outlet and has not been audited. Cordova explicitly states that this information is not a forecast or projection of future financial performance. Prospective franchisees should consider these figures as a reference point and not as a guarantee of similar financial outcomes. Cordova also states that the financial information was not prepared on a basis consistent with generally accepted accounting principles.