Are the rights granted to a Cordova franchisee in Article 2.A exclusive?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) During the Term of this Agreement and subject to the rights of Franchisor including, but not limited to, the Reserved Rights, Franchisor grants to Franchisee and Franchisee accepts, the non-exclusive license, right and obligation to develop and operate a Cordova Business within the operating territory designated and set forth in Schedule 1 of this Agreement (the "Operating Territory"). If Schedule 1 does not specifically identify and designate an Operating Territory, and/or if Schedule 1 is not signed by Franchisor, the Operating Territory shall be determined by Franchisor in Franchisor's Reasonable Business Judgment;
Source: Item 23 — RECEIPTS (FDD pages 44–195)
What This Means (2025 FDD)
According to the 2025 Cordova Franchise Disclosure Document, the rights granted to a franchisee in Article 2.A are non-exclusive. Specifically, the franchisee receives a "non-exclusive license, right and obligation to develop and operate a Cordova Business within the operating territory".
This means that Cordova retains the right to operate or franchise other businesses, even those that may be competitive, outside the franchisee's designated operating territory. Cordova also reserves the right to engage in various activities, including operating and granting others the right to operate franchised businesses using the Cordova system and licensed marks outside the franchisee's territory.
Prospective franchisees should be aware that Cordova can acquire, develop, merge with, or affiliate with other businesses, including competitive ones, and operate or franchise them, even within the franchisee's operating territory, as long as they do not use Cordova's licensed marks. This lack of exclusivity is a common arrangement in franchising, but it's crucial for franchisees to understand the potential for competition from the franchisor or other franchisees.