Can Cordova transfer its contractual obligations to a Cordova franchisee?

According to Cordova's 2025 Franchise Disclosure Document, a franchisee's obligations under the Franchise Agreement and Ancillary Agreements can be assumed by a transferee, each individual owner of the transferee, and their respective spouses, provided it is done in a manner satisfactory to Cordova. This means that if a franchisee sells their Cordova business, the new owner (transferee) can take on the original franchisee's responsibilities and duties outlined in the agreements.

However, this transfer is not automatic and is subject to several conditions. The franchisee must provide written notice to Cordova at least 30 days before the proposed transfer and fulfill other obligations outlined in Article 14.F. All outstanding monetary and other obligations to Cordova and its affiliates must be satisfied in a timely manner, and neither the franchisee, any owner, nor any spouse can be in default or material breach of the agreements. The transferee must also agree to be bound by all the terms and conditions of the Franchise Agreement, and each owner of the transferee and their spouses must personally execute the Franchise Owner and Spouse Agreement and Guaranty.

Furthermore, Cordova requires that the franchisee, each owner, and each spouse execute a General Release, releasing Cordova and its affiliates from any claims arising on or before the transfer date. Cordova also has the option to require the transferee to execute the then-current standard form Franchise Agreement for a term ending on the original agreement's expiration date, especially if the transfer involves substantially all of the franchised business's assets or a controlling interest in the franchisee. This new agreement must provide for the same Royalty Fee, Advertising Contributions, and all other financial or monetary obligations established in the original agreement.

In addition to assuming the obligations, the transferee is typically required to improve the Administrative Office to meet Cordova's current standards, complete any required training programs, and ensure that employees with access to confidential information execute a Confidentiality Agreement. The franchisee must also pay a $20,000 Transfer Fee to Cordova. These stipulations ensure that Cordova maintains control over its brand standards and financial interests during and after the transfer of a franchise.