Where is a Cordova franchisee permitted to operate the Franchised Business?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) Franchisee must administratively manage and coordinate the operations of the Franchised Business from Franchisee's Administrative Office located within Franchisee's Operating Territory;
- (5) Franchisee may only operate the Franchised Business within Franchisee's Operating Territory and, without limitation to the foregoing, Franchisee may only offer and sell the Approved Services and Products within Franchisee's Operating Territory, the System standards designated by Franchisor, and in accordance with the requirements designated by Franchisor in the Operations Manual;
- (6) Except as otherwise provided in this Agreement including, but not limited to, the Reserved Rights and Closed Markets, provided that, at all times, Franchisee is and remains in compliance with the terms of this Agreement, during the Term of this Agreement, Franchisor will not and Franchisor's affiliates will not operate, or grant a franchisee the right to operate a Cordova Business using the Licensed Marks and System within Franchisee's Operating Territory, provided that an Operating Territory has been designated and approved by Franchisor in accordance with the terms of this Agreement; and
- (7) The foregoing rights granted in this Article 2.A. are subject to and contingent upon each and every, term and condition of this Agreement, the rights of any prior user, and are non-exclusive and subordinate to the Reserved Rights.
Source: Item 23 — RECEIPTS (FDD pages 44–195)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, a franchisee may only operate the Franchised Business within their Operating Territory. This means the franchisee can only offer and sell approved services and products within this designated area, adhering to Cordova's system standards and the requirements outlined in the Operations Manual. The franchisee must also administratively manage and coordinate the business from an Administrative Office located within their Operating Territory. The location of the Administrative Office must be approved by Cordova, as evidenced by its designation in Schedule 3 of the Franchise Agreement, which must be signed by the franchisor.
Cordova retains specific rights that could impact a franchisee's territory. These Reserved Rights allow Cordova and its affiliates to operate or franchise other businesses using the System and Licensed Marks outside the franchisee's Operating Territory. Cordova can also acquire, develop, merge with, or affiliate with other businesses, including competitors, and operate them (though not using Cordova's Licensed Marks) within the franchisee's Operating Territory. These rights are subject to the terms and conditions of the Franchise Agreement and the rights of any prior users, and they are non-exclusive and subordinate to Cordova's Reserved Rights.
During the term of the agreement, Cordova and its affiliates will not operate or grant another franchisee the right to operate a Cordova Business using the Licensed Marks and System within the franchisee's Operating Territory, provided that an Operating Territory has been designated and approved by Cordova and the franchisee remains in compliance with the agreement. This provides a level of territorial protection, but it is contingent upon the franchisee's adherence to the agreement's terms and the prior approval of the Operating Territory by Cordova.
Prospective franchisees should carefully review Schedule 3 of the Franchise Agreement to understand the exact boundaries of their Operating Territory. They should also consider the potential impact of Cordova's Reserved Rights on their business. It is important to ensure that the designated territory offers sufficient market potential to support a successful Cordova Business, given the restrictions and rights retained by the franchisor.