How is the advertising contribution for a Carvel franchise determined?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
10. Section 3.2.B. (Advertising Contribution):
The Advertising Contribution shall be in an amount we determine, in our sole discretion, which when combined with the Local Marketing Obligation (as specified in Section 10.1.E. (Local Marketing Obligation)) shall not exceed 5% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you). We will collect the Advertising Contribution from you based on the portion of the Net Sales of the Franchised Business that are attributable to products that we and the Co-Branded Franchisor mutually agree, in our and its sole discretion, to credit towards the Carvel® side of the Franchised Business. Pursuant to the Co-Branded Agreement, the Co-Branded Franchisor will collect an advertising contribution from you based on the remaining portion of the Net Sales of the Franchised Business that are attributable to products that we and the Co-Branded Franchisor mutually agree, in our and its sole discretion, to credit towards the Co-Branded Franchise's side of the Franchised Business.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the advertising contribution is determined by Carvel in its sole discretion. The amount, when combined with the Local Marketing Obligation, will not exceed 5% of the Net Sales of the Franchised Business. This contribution is payable each week based on the Net Sales of the preceding week, or as otherwise stated in the manuals or written notice from Carvel.
For a co-branded franchise, Carvel will collect the Advertising Contribution based on the portion of Net Sales attributable to products that Carvel and the Co-Branded Franchisor mutually agree to credit towards the Carvel side of the business. The Co-Branded Franchisor will collect an advertising contribution based on the remaining portion of Net Sales attributable to products credited towards their side of the business.
This means that as a Carvel franchisee, you must pay an advertising contribution, the specific amount of which is decided by Carvel. However, this contribution, along with any local marketing obligations, cannot exceed 5% of your franchise's net sales. The contribution is typically paid weekly, but Carvel reserves the right to change the payment schedule. For franchisees operating a co-branded location, the advertising contributions are split between Carvel and the co-branding partner based on the net sales attributed to each brand's products.