To whom is the Cordova initial franchise fee of $40,000 paid?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Amount | When Due | To Whom Payment is Made | |
|---|---|---|---|---|
| Initial Franchise Fee | $40,000 | Lump sum | When Franchise | Us |
| (Note 1) | Agreement is signed |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, the initial franchise fee of $40,000 is paid to 'Us,' meaning the franchisor. This fee is due in a lump sum when the Franchise Agreement is signed. This information is detailed in Item 7, which outlines the estimated initial investment for a single territory Cordova business.
This initial franchise fee grants the franchisee the right to operate a Cordova business within a defined territory. It covers Cordova's initial costs in setting up the franchise system and providing initial support and training to the franchisee. As noted in Note 1, all fees are non-refundable, and Cordova does not finance any portion of the initial fees.
Prospective franchisees should be aware that this $40,000 fee is just one component of the total estimated initial investment, which ranges from $54,000 to $251,500 for a single territory. Other expenses include construction and leasehold improvements, lease deposits, utility deposits, furniture, fixtures, equipment, initial inventory, computer systems, marketing, insurance, training travel, professional fees, licenses, and additional operating funds. Understanding where each payment is directed is crucial for budgeting and financial planning.
It is also important to note that if a franchisee elects to expand their operating territory by adding additional territories, the initial franchise fee will increase, ranging from $70,000 for two territories to $133,000 for five territories. Therefore, the initial franchise fee can vary significantly depending on the scope of the franchise operation.