Besides franchise revenues, what other sources contribute to the business revenues of Carvel and the other Franchising Entities?

According to Carvel's 2025 Franchise Disclosure Document, the Franchising Entities' business revenues are primarily generated from various sources in addition to franchise revenues. These include royalty and mix fees, which are ongoing payments franchisees make based on a percentage of their sales and the purchase of ice cream mix.

Development and franchise fees also contribute to the revenue stream. These are typically one-time fees paid by franchisees when they initially join the Carvel system or expand their operations by developing new locations. Licensing fees, rebates from certain vendors, and digital transaction fees further supplement the revenue. Licensing fees may arise from allowing third parties to use the Carvel brand or trademarks, while rebates from vendors could be incentives for purchasing supplies through approved channels. Digital transaction fees likely stem from online orders or other digital sales processed through the Carvel system.

For a prospective Carvel franchisee, understanding these diverse revenue streams is crucial. While royalty fees are a direct cost tied to sales performance, other fees like development and franchise fees represent upfront investments. The rebates from vendors could potentially lower the cost of goods, and digital transaction fees may impact profitability depending on the volume of online sales. It's important to note that certain affiliates of the company administer advertising funds on behalf of the brands' franchise systems, but these affiliates are not included in the company's consolidated financial statements.