Are there exceptions to violations of the Cordova Franchise Agreement?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| | | Business; timely develop and open your Cordova | | | | Business; | | | | operate | | | | your | | | | Cordova | | | | Business | | | | in | | | | accordance | | | | with | | | | the | | | | specifications, standards, and requirements set forth in our | | | | Manuals; develop or operate your Cordova | | | | Business in | | | | compliance with all federal, state, and local laws, rules, and | | | | regulations, unless, such violation poses a threat to public health | | | | or safety; maintain insurance coverage that we require; comply | | | | with our standards, systems or specifications as we may designate | | | | or as otherwise designated in the operations manual; fail to | | | | operate your Cordova | | | | Business in conformity with our System or | | | | otherwise violate the Franchise Agreement, except as to events of | | h. "Cause" defined-non-curable defaults | 16.A.(1), 16.A.(2) | The following are defaults that cannot be cured: three or more instances where you commit a curable default, whether or not you timely cured such default in each instance; you intentionally and knowingly refuse to comply with the terms of the Franchise Agreement, and/or the standards specifications, and/or requirements set forth in the operations manual and/or as communicated to you by us from time to time; you intentionally, knowingly, or negligently operate the Franchised Business in violation of applicable laws, rules, and regulations and, in doing so, create a foreseeable, imminent, and/or immediate threat to the health and safety of others; you abandon the Franchised Business; you or your Owners intentionally made a material statement or omission in questionnaires submitted to us; the data, information, and/or records that you record and/or submit to us are intentionally misleading or false; you transfer or attempt to transfer the Franchised Business or the ownership interests in your franchise company without our approval; you disclose or permit the disclosure of information contained in the operations manual and/or of confidential information; you or your Owners engage in intentionally dishonest or unethical conduct that impacts our System; you and/or your Owners breach and, if such breach is capable of a cure, fail to timely cure another agreement with us, including the Owner and Spouse Agreement and Guaranty; you and your Owners and managers fail to complete, to our satisfaction, our initial and on-going training programs; you fail to notify us of the misuse of confidential information and you fail to protect same; you misappropriate or misuse the Licensed Marks; you are deemed insolvent, make an assignment for the benefit of creditors, admit in writing your inability to pay debts; are adjudicated bankrupt, file a voluntary bankruptcy petition or have one filed against you, and/or you acquiesce to the appointment of a trustee or receiver, or a court orders one; execution is levied against the Franchised Business; a final judgment is entered against the Franchised Business and is not satisfied within 30 days; you are dissolved; a lawsuit or action is commenced against the Franchised Business to foreclose on a lien on equipment of the Franchised Business and such action is not dismissed after 60 days; real or personal property used by the Franchised Business is sold or levied by a sheriff or other law | |-----------------------------------------------|-----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 33–37)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, there are limited exceptions to violations of the franchise agreement. Franchisees must operate their Cordova business in compliance with all federal, state, and local laws, rules, and regulations, unless such violation poses a threat to public health or safety. This suggests that minor, non-health-threatening violations might be considered exceptions.
The FDD also outlines specific defaults that cannot be cured. These include instances where a franchisee commits three or more curable defaults, intentionally refuses to comply with the Franchise Agreement or operations manual, or operates the Franchised Business in violation of applicable laws, rules, and regulations, creating a foreseeable, imminent, and/or immediate threat to the health and safety of others. Other non-curable defaults include abandoning the Franchised Business, making intentional material misstatements, transferring the Franchised Business without approval, disclosing confidential information, or engaging in dishonest conduct that impacts the Cordova system.
These stipulations are important for prospective franchisees to understand, as they highlight the types of violations that could lead to termination of the franchise agreement. Franchisees should ensure they fully understand and comply with all requirements outlined in the Franchise Agreement and operations manual to avoid defaults, especially those that are non-curable.
In summary, while there is a limited exception for violations that do not pose a threat to public health or safety, Cordova franchisees must be diligent in adhering to all other terms and conditions of the franchise agreement to avoid potential termination.