When is the Supplemental Royalty fee due for a Cordova franchise?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | |
|---|---|---|---|
| Royalty (Notes 2 and 3) | 10% of Gross Sales | Monthly as designated by us | Will be debited automatically from your bank account by ACH or other means designated by us. See, Notes 2 and 3 for Minimum Quarterly Royalty Fee Requirement. |
| Supplemental Royalty (Notes 2 and 3) | Varies depending on satisfaction of Minimum Quarterly Royalty Fee Requirements | On 15th of the month following the end of each calendar year quarter | Will be debited automatically from your bank account by ACH or other means designated by us. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, the Supplemental Royalty Fee is due on the 15th of the month following the end of each calendar year quarter. This fee is applicable if the aggregate amount of Royalty Fees paid by the franchisee during the calendar year quarter does not equal or exceed the Minimum Quarterly Royalty Fee Requirement. In such cases, the franchisee must pay Cordova the difference as a supplemental royalty fee. Cordova will debit this fee automatically from the franchisee's bank account via ACH or other designated means.
In simpler terms, Cordova franchisees are required to pay a royalty fee of 10% of their monthly Gross Sales. However, Cordova also sets a Minimum Quarterly Royalty Fee Requirement. At the end of each calendar quarter (March 31, June 30, September 30, December 31), Cordova will assess whether the franchisee's total royalty payments for that quarter met the minimum requirement. If the royalty payments fell short, the franchisee will owe a Supplemental Royalty Fee to cover the difference. This supplemental payment is due on the 15th of the following month (April 15, July 15, October 15, January 15).
For a prospective Cordova franchisee, it's crucial to understand how the Minimum Quarterly Royalty Fee Requirement is determined, as this directly impacts the potential for owing Supplemental Royalty Fees. The amount of the Minimum Quarterly Royalty Fee Requirement depends on the number of Territories comprising the Operating Territory. Franchisees should factor this potential additional cost into their financial projections and business planning. The FDD includes a table showing the Minimum Quarterly Royalty Fee Requirement for the first 10 years of operation, based on the number of territories.