What California laws are recognized by the California Addendum to the Carvel Franchise Agreement?

According to Carvel's 2025 Franchise Disclosure Document, the California Addendum to the Franchise Agreement recognizes two key sets of California laws. These are the California Franchise Investment Law (§§ 31000 through 31516) and the California Franchise Relations Act (California Business and Professions Code §§ 20000 through 20043). This recognition means that Carvel acknowledges these laws apply to franchises offered and sold in California or to California residents.

Several provisions within the standard Carvel Franchise Agreement are modified or may be unenforceable in California due to these laws. For example, a general release that a franchisee might be asked to sign upon renewal or transfer of the franchise cannot waive rights under either the California Franchise Investment Law or the California Franchise Relations Act. Similarly, while the standard agreement is governed by Georgia law and requires binding arbitration in Georgia, these provisions may not be enforceable under California law. The covenant not to compete extending beyond the franchise term may also face enforceability issues in California.

These stipulations are important for prospective Carvel franchisees in California because they highlight areas where California law provides additional protection or alters the standard terms of the franchise agreement. Franchisees should consult with legal counsel to fully understand their rights and obligations under California law, especially concerning termination, transfer, dispute resolution, and non-compete clauses. The addendum ensures that franchisees are aware of these potential conflicts and that Carvel intends to comply with California law in its dealings with franchisees in the state.