What is the timeframe for calculating the Supplemental Royalty Fee for a Cordova franchise?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
by more than 10% per annum.
On a calendar year quarterly basis, if the aggregate amount of the Royalty Fees paid by you and received by us from your Cordova Business during the respective calendar year quarter does not equal or exceed the aggregate amount of your Minimum Quarterly Royalty Fee Requirement for each calendar year quarter, then you must pay to us the difference as a supplemental royalty fee (the "Supplemental Royalty Fee"). The Supplemental Royalty Fee is calculated as the difference between the amount of the Minimum Quarterly Royalty Fee Requirement for the applicable calendar year quarter, less the aggregate amount of the Royalty Fees that you paid to us during the respective calendar year quarter.
If any federal, state or local tax other than an income tax is imposed on the Royalty Fee which we cannot directly and, dollar for dollar, offset against taxes required to be paid under any applicable federal or state laws, you must compensate us in the manner prescribed by us so that the net amount or net effective Royalty Fees received by us is not less than the greater of: (a) 10% of your monthly Gross Sales; or (b) the applicable Minimum Quarterly Royalty Fee Requirement.
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 calculated on a calendar year quarterly basis. This means Cordova assesses whether the royalty fees you paid during each calendar quarter (January-March, April-June, July-September, October-December) meet the minimum quarterly royalty fee requirement.
If the total royalty fees Cordova receives from your business during a calendar quarter are less than your minimum quarterly royalty fee requirement for that quarter, you must pay the difference as a Supplemental Royalty Fee. This fee is the difference between the minimum quarterly requirement and the actual royalty fees paid during that specific calendar quarter.
The Supplemental Royalty Fee is due on the 15th of the month following the end of each calendar year quarter. Cordova will automatically debit this fee from your bank account via ACH or another designated method. This ensures that Cordova receives at least the minimum royalty amount for each quarter, as outlined in the franchise agreement.