Can Cordova withhold approval of a supplier for my Cordova franchise at its discretion?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
If you want to purchase or lease a source restricted item from a supplier that has not been previously approved or designated by us in writing, you must send us a written request for approval and submit additional information that we may request. We may charge you a supplier review and testing fee and we may request that you send us samples from the supplier for testing and documentation from the supplier for evaluation. We may also require, subject to our discretion, that we be allowed to inspect the supplier's facilities. We will notify you of our approval or disapproval within a reasonable time, not to exceed 60 days, after we receive your written request for approval and all additional information and samples that we may request. We may, in our discretion, withhold our approval. When evaluating the approval of a particular supplier, among other things, we consider: whether the supplier can demonstrate to our reasonable satisfaction the ability to meet our standards, specifications and production requirements, the supplier's quality control, whether or not we are the exclusive supplier of the particular item, whether or not our affiliate or affiliates are the exclusive supplier of the particular item, and whether or not the supplier's approval, in our sole determination, will allow us to advance the overall interests of the System.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, Cordova retains the discretion to withhold approval of a supplier. If a franchisee wishes to purchase or lease source-restricted items from a supplier not already approved, they must submit a written request to Cordova, along with any additional information requested by Cordova. Cordova may also charge a supplier review and testing fee, request samples for testing, and inspect the supplier's facilities.
Cordova will then notify the franchisee of its decision within 60 days of receiving the request and all required information. However, Cordova explicitly states that it "may, in our discretion, withhold our approval." When evaluating a supplier, Cordova considers factors such as the supplier's ability to meet Cordova's standards, quality control, whether Cordova or its affiliates are exclusive suppliers of the item, and whether approving the supplier will advance the overall interests of the Cordova system.
This means that even if a supplier meets all of Cordova's technical requirements, Cordova can still deny approval based on its own assessment of the system's best interests. This gives Cordova significant control over the supply chain and ensures uniformity across all franchises.
For a prospective franchisee, this highlights the importance of understanding Cordova's approved supplier list and the criteria used for supplier approval. It also means that franchisees may have limited flexibility in sourcing products and services, and should factor this into their business planning.