What are the acceptable methods for a Carvel franchisee to submit reports?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
ale system and other equipment provided for in Section 12.8 (Computer System), the results of an audit, or the payment obligations specified in this Agreement or any other agreement between you and us or our affiliates. If you fail to report the Net Sales of the Franchised Business to us for any reporting period as required in this Agreement, we have the right to make bank transfers or drafts for Royalty Fees and Advertising Contributions based on our reasonable estimate of the amounts for the Franchised Business and/or the data of the point-of-sale system and other equipment provided for in Section 12.8.
- 3.5 Interest. You must pay us interest on amounts not paid on time at the rate of 1.5% per month or portion of a month, but not more than the maximum interest rate permitted by applicable laws.
- 3.6 Late Reporting Fee. If you fail to submit timely, complete, and accurate reports, financial statements, tax returns, and statements of initial investment costs in accordance with Sections 14.3 (Systems and Reports), 14.4 (Financial Statements), 14.5 (Tax Returns), and 14.7 (Initial Investment Statements), we may charge you our then-current late fee (the "Late Reporting Fee"). The Late Reporting Fee is currently $50 per week that such report, statement, or return is late. We may increase the Late Reporting Fee in any calendar year by no more than the Allowed Adjustment.
- 3.7 Application of Funds; Withholding of Payments. If you are late in paying any obligation you owe us or our affiliates, we or our affiliates may apply any payment you make to any obligation you owe us or our affiliates, whether or not you make any designation to the contrary. You may not withhold or set off payment of any amount you owe us or our affiliates on grounds of alleged non-performance of any obligation we or they owe you.
4. RESERVED RIGHTS
- 4.1 Reserved Rights.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to the 2025 Carvel Franchise Disclosure Document, franchisees are required to adhere to the reporting systems outlined in Section 14.3. If a Carvel franchisee fails to submit timely, complete, and accurate reports, financial statements, tax returns, and statements of initial investment costs as required, Carvel may charge a late fee. The current late fee is $50 per week for each late report, statement, or return. Carvel retains the right to increase this late reporting fee annually, but the increase will not exceed the Allowed Adjustment.
Furthermore, Carvel may specify new or additional procedures for report submission in the Manuals or in writing. Franchisees must comply with these updated procedures, which may include signing and delivering necessary documents within 30 days of notice from Carvel. These documents may authorize Carvel to initiate debit entries or credit corrections. Carvel can also make bank drafts based on the reports required, data from the point-of-sale system, audit results, or payment obligations outlined in the Franchise Agreement.
If a Carvel franchisee fails to report net sales for any reporting period, Carvel has the right to make bank transfers or drafts for Royalty Fees and Advertising Contributions based on a reasonable estimate of the amounts due, using data from the point-of-sale system or other equipment. This highlights the importance of accurate and timely reporting to avoid estimated payments. Franchisees should ensure they understand and comply with all reporting requirements to avoid potential fees and estimated drafts.