Is the Carvel Advertising Contribution in addition to the Grand Opening Obligation?

According to Carvel's 2025 Franchise Disclosure Document, the Advertising Contribution is indeed in addition to the Grand Opening Obligation. Carvel franchisees are required to make Advertising Contributions to the Ad Fund, which is used for advertising and promoting the Shoppes, Proprietary Marks, and the System. Currently, this contribution is 3% of Net Sales, but it can vary for Cinnabon Co-Branded Shoppes in Other Locations (2.5%) and is not required for Hosted Express Shoppes. Carvel retains the right to increase this percentage with notice, but the combined Advertising Contribution and Local Marketing Obligation will not exceed 5% of Net Sales.

In addition to the Advertising Contribution, Carvel franchisees must also fulfill a Local Marketing Obligation, which requires spending at least 2% of Net Sales on local market advertising each calendar quarter (1% for Ice Cream Trucks or Co-Branded Shoppes). This local marketing spend is separate from both the Advertising Contribution and the Grand Opening Obligation. Carvel has the option to manage the Local Marketing Obligation funds themselves for advertising purposes, in which case the franchisee would be reimbursed for these expenses.

The Grand Opening Obligation requires franchisees to spend a specified amount on advertising to promote the opening of their Carvel Shoppe, within a period of 90 days before and 90 days after opening. The minimum spend varies based on the Shoppe's location and type, ranging from $3,000 for a Shoppe in an Other Location to $25,000 for one of the first four Co-Branded Shoppes in an Emerging Market in a Streetside Location. This obligation may be waived for Shoppes in captive audience locations, at Carvel's discretion. Therefore, franchisees need to budget for all three: the ongoing Advertising Contribution, the Local Marketing Obligation, and the initial Grand Opening Obligation.