Is the Carvel Advertising Contribution in addition to the Local Marketing Obligation?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
unt of 3% of Net Sales, except if you operate a Cinnabon Co-Branded Shoppe in Other Locations (excluding Swirl Shoppes) the contribution is 2.5% of Net Sales and if you operate a Hosted Express Shoppe no contribution is required. We may increase the Advertising Contribution by notice to franchisees. However, your required Advertising Contribution and Local Marketing Obligation will collectively not exceed 5% of your Net Sales. Your Advertising Contribution is in addition to your Local Marketing Obligation and your Grand Opening Obligation (as defined below).
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 59–74)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Advertising Contribution is indeed in addition to the Local Marketing Obligation and the Grand Opening Obligation. Carvel franchisees must contribute to the Ad Fund, which is used for advertising and promoting Carvel Shoppes, Proprietary Marks, and the System. The standard Advertising Contribution is 3% of Net Sales, but it is 2.5% for Cinnabon Co-Branded Shoppes in Other Locations (excluding Swirl Shoppes), and no contribution is required for Hosted Express Shoppes.
Carvel franchisees are also obligated to spend a minimum of 2% of Net Sales each calendar quarter on local market advertising to fulfill their Local Marketing Obligation (1% of Net Sales for Ice Cream Trucks or Co-Branded Shoppes). This local spending is separate from the Ad Fund contributions. However, the combined Advertising Contribution and Local Marketing Obligation will not exceed 5% of Net Sales.
Amounts paid by Carvel franchisees to an Advertising Cooperative will be credited against the Local Marketing Obligation, but any contributions to an Advertising Cooperative are in addition to the Advertising Contribution and Grand Opening Obligation. Carvel retains the right to increase the Advertising Contribution with notice to franchisees.