If Cordova reimburses a client directly, what is the franchisee's obligation?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 8: Customer Services and Refunds – This fee will be based on the costs incurred by us, including refunds and/or credits that we may undertake on behalf of a client that was not satisfied with the services or products provided by the Franchised Business. You must guarantee your services to your clients. If we determine that your client is entitled to reimbursement of fees paid to you, we may reimburse your client directly. You must reimburse us for the amounts that we reimburse your client. You must also participate in any warranty insurance programs that we designate.
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, franchisees must guarantee their services to clients. If Cordova determines that a client is entitled to reimbursement for fees paid to the franchisee, Cordova may directly reimburse the client. In such cases, the franchisee is obligated to reimburse Cordova for the amount that Cordova reimbursed the client.
This means that as a Cordova franchisee, you are ultimately responsible for ensuring client satisfaction. If a client is dissatisfied with your services and Cordova agrees to reimburse them, you will have to pay that reimbursement amount back to Cordova. This could impact your profitability, especially if client dissatisfaction is frequent.
It is also important to note that the FDD states that franchisees must participate in any warranty insurance programs that Cordova designates. This may provide some protection against client reimbursement costs, but the details of such programs (coverage, premiums, deductibles, etc.) are not specified in this section and would need to be investigated further.