What is the maximum monthly Technology Fee that Cordova may charge?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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% |
| Less: Adjustments for Select Franchise Related Expenses | ||
| Royalty Fee2 | ($1,377,122) | 10.0% |
| Brand Development Fund Fee3 | N/A | 0.0% |
| Technology Fee4 | ($4,200) | 0.0% |
| Local Marketing5 | N/A $2,035,583 | 0.0% |
| Notes to Table: | ||
| 1 “%” represents the percentage of total Gross Sales. | ||
| 2 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. | ||
| 3 The Brand Development Fund Fee is currently not assessed but we reserve the right to collect a Brand Development Fund | ||
| Fee of up to 2% of Gross Sales. | ||
| 4 The Technology Fee is currently $350 per month |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 37–41)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, the Technology Fee is currently $350 per month. However, Cordova reserves the right to increase this fee. The maximum Technology Fee that Cordova may charge is $750 per month.
For a prospective franchisee, this means that while the initial monthly Technology Fee is set at $350, it's crucial to budget for a potential increase of up to $400 per month. This increase could impact the overall profitability of the franchise, especially in the early stages of operation when cash flow might be tight. Franchisees should factor this potential rise in expenses into their financial projections and business plans.
It is important for potential franchisees to discuss with Cordova the conditions under which the Technology Fee might be increased. Understanding the factors that could trigger a fee hike will allow franchisees to better prepare for and manage their expenses. This proactive approach can help mitigate financial risks and ensure the long-term viability of the Cordova franchise.