Can Carvel or its affiliates establish franchises or company-owned businesses offering similar products near my Accepted Location?

According to Carvel's 2025 Franchise Disclosure Document, Carvel and its affiliates retain the right to establish or license franchises and/or company-owned businesses offering similar or identical products to the approved products using the Carvel system, proprietary marks, or any other marks, even at or near a franchisee's accepted location. This means that Carvel franchisees may face direct competition from other Carvel locations, including those owned by the company itself or by other franchisees.

This lack of exclusive territory is a significant factor for prospective franchisees to consider. Carvel does not grant any exclusive territory or other territorial rights other than the right to sell approved products at retail from the Shoppe, except for Co-Branded Shoppes in Streetside Locations. The FDD states that Carvel may open or franchise new Carvel Shoppes near a franchisee's shop without consulting them, giving them the first right to open them, or paying any compensation.

Furthermore, other affiliate-owned or franchised Carvel Shoppes near a franchisee's shop that are already in existence or opened later under Franchise Agreements may compete directly with the franchisee, provide services in close proximity without compensating the franchisee, and possibly adversely affect the operation of their shop or their development of shops. This competitive environment extends to sales of products by Carvel's licensed manufacturer to grocery stores, supermarkets, club stores, super-stores, mass merchants, commissaries, exchanges on United States military bases, and selected restaurants, all of which may also compete with a franchisee's franchised shop. Therefore, a Carvel franchisee needs to be prepared to compete with other Carvel outlets and alternative channels of distribution.