For a Carvel co-branded franchise, which fees can Carvel and the Co-Branded Franchisor both independently impose?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
E. Section 3 (Fees) is amended by adding the following as Section 3.8:
3.8. Collection of Fees for Co-Branded Franchises. We and the Co-Branded Franchisor may both independently impose the following fees in accordance with the terms of this Agreement and/or the Co-Branded Agreement (in other words, (a) we could charge the fee and the Co-Branded Franchisor could also separately charge the same fee or (b) we could charge the fee, even if the Co-Branded Franchisor does not do so): (i) the Renewal Fee; (ii) the Ordering Support Fee; (iii) fees related to Advertising Cooperatives, brand promotions, taxes and related payments, conferences and programs, brand advisory councils, Transfers, gift card and loyalty programs, loyalty apps, online ordering, purchasing programs, supply chains, insurance policies, development deadline extensions, indemnification provisions, attorneys' fees, and the reinstatement of franchises; and (iv) any other fees that are brand-specific or relate to costs that may be separately incurred by us and/or the Co-Branded Franchisor. All other fees will be charged by (x) us or the Co-Branded Franchisor, but not both or (y) jointly by both us and the Co-Branded Franchisor (and split between the two of us).
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, both Carvel and the Co-Branded Franchisor have the autonomy to independently impose specific fees on co-branded franchises. This means that either Carvel or the Co-Branded Franchisor can charge these fees, regardless of whether the other party does. Alternatively, both Carvel and the Co-Branded Franchisor could charge the same fee separately.
The fees that both Carvel and the Co-Branded Franchisor can independently impose include the Renewal Fee and the Ordering Support Fee. Additionally, fees related to advertising cooperatives, brand promotions, taxes and related payments, conferences and programs, brand advisory councils, transfers, gift card and loyalty programs, loyalty apps, online ordering, purchasing programs, supply chains, insurance policies, development deadline extensions, indemnification provisions, and attorneys' fees can be independently imposed by either party. Fees related to the reinstatement of franchises also fall under this category.
Furthermore, any other fees that are brand-specific or related to costs separately incurred by Carvel and/or the Co-Branded Franchisor can be independently imposed. All other fees not listed will be charged either by Carvel or the Co-Branded Franchisor, but not by both independently. In some cases, these other fees may be charged jointly and split between Carvel and the Co-Branded Franchisor.
This fee structure provides Carvel and its co-branding partner flexibility in managing and recovering costs associated with the co-branded franchise. However, it also means that franchisees need to carefully review both the Carvel franchise agreement and the Co-Branded Agreement to fully understand the potential fees they may be required to pay and to whom those fees are payable.