How might Carvel collect fees due under the Franchise Agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
ee. Currently, $50 per week. | On invoice | You must pay this late fee if you fail to submit timely, complete and accurate reports, financial statements, tax returns, and statements of initial investment costs when due. We may change this fee in any year by no more than the Allowed Adjustment (as defined in Note 3). | | Type of Fee1, 4 | Amount | Date Due | Remarks | |-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|-----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Taxes and Other Payments | Our costs and expenses | Within 10 days after demand | You must pay us or our affiliates (i) all sales taxes, corporate taxes, and any similar taxes paid by us on your behalf, imposed on us, or required to be collected by us on account of products or services we furnish to you (through sale, lease, or otherwise) or on account of our collection of any fee related to the Franchise Agreement; (ii) all franchise or similar taxes, whether based on gross receipts, gross revenues, Royalty Fees, Advertising Contributions, or otherwise, imposed on, required to be collected by, or paid by us; (iii) all marketplace facilitator or similar taxes imposed on, required to be collected by, or paid by us in connection with your use of our website, internet sites, applications, or online ordering platforms; (iv) all other amounts we pay or must pay for you for any reason; and (v) any other fees or expenses that we are entitled to collect from you. | | Subsequent Trainee Management Training Fee | Our then-current fee. Currently, $250 per trainee per day. | Before attending training | You must pay this fee if you appoint a new Manager, Primary Contact, Director of Operations, or other person we designate after your Shoppe opens, and we provide the Management Training Program to them. We may change this fee in any year by no more than the Allowed Adjustment. | | On-Site Training and Assistance Fee | A reasonable fee. Currently, $500 per trainer per day, plus their travel and living expenses. | On invoice | At any time, you can request, or we may require, additional on-site training and assistance beyond that which we must provide. We have no obligation to provide on-site training or assistance. We may change this fee in any year by no more than the Allowed Adjustment. | | Additional Support/ Consulting Fee | A reasonable fee. Currently, $500 per representative per day, plus their travel and living expenses. | On invoice | We may offer you consultation services beyond the support services under the Franchise Agreement, and if you accept them, we can charge you a consulting fee. We may change this fee in any year by no more than the Allowed Adjustment. | | Conference/ Program Fee | A reasonable fee, which will vary by program. Currently, ranges from $0 to $2,500 per attendee. | As incurred | We may charge you a reasonable fee for any conferences, conventions, programs, or training sessions that we conduct. We may change this fee in any year by no more than the Allowed Adjustment. | | Training Cancellation Fee | The fees for the cancelled program and our out-of-pocket costs. | On invoice | If you fail to cancel scheduled training at least 14 days prior to such training or if you are not prepared to successfully complete training, we may charge you the cost of conducting the originally scheduled training (including any training fees and any travel and living expenses incurred by our representatives). |
| Type of Fee1, 4 | Amount | Date Due | Remarks |
|---|---|---|---|
| We may require you to pay the training fee again for the rescheduled training. | |||
| Learning Management System License Fee | The then-current fee. Currently, $170 per year. | As incurred | We may require you to license an electronic learning management system (the "Learning Management System") to participate in certain required training programs and access the Manuals. We may require you to pay this fee to us, an affiliate, or a third-party vendor. We may change this fee in any year by no more than the Allowed Adjustment. |
| Sublease Administration Fee | Our then-current fee. Currently, $200 per month. | As incurred | If you sublease a Shoppe from us, you must pay us this fee to compensate us for our administrative expenses. The fee is in addition to any fees under the sublease such as rent, insurance, public utility charges, late fees, alterations and improvements. We may change this fee in any year by no more than the Allowed Adjustment. |
| Lease Renewal/ Extension Review Fee | Our then-current fee. Currently, ranges from $500 for a lease term of two years or less to $2,000 for a term of five years or more. |
Source: Item 6 — OTHER FEES (FDD pages 31–42)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel may collect fees through various methods depending on the specific fee. For instance, if a franchisee fails to make the minimum local advertising expenditures, Carvel may make those expenditures on the franchisee's behalf and require reimbursement. Carvel can also elect to collect all or a portion of the Local Marketing Obligation from the franchisee and use it for advertising purposes or contribute it to the franchisee's Advertising Cooperative.
For insufficient funds fees, if Carvel drafts money from a franchisee's account via electronic funds transfer and the funds are insufficient, Carvel may charge a fee to cover their costs and expenses, including bank return charges. This is in addition to any interest on the amount due. Interest on past due amounts can be charged at the lesser of 1.5% per month or the maximum legal interest rate. Late Reporting Fees, currently at $50 per week, are invoiced to franchisees who fail to submit timely, complete, and accurate reports, financial statements, tax returns, and statements of initial investment costs.
Additionally, Carvel may require franchisees to pay sales taxes, corporate taxes, and similar taxes paid by Carvel on the franchisee's behalf. These payments are due within 10 days after demand. For on-site training and assistance, as well as additional support or consulting, Carvel will issue an invoice for the services provided, along with associated travel and living expenses. Training Cancellation Fees, covering the costs of the cancelled program and out-of-pocket expenses, are also invoiced. These various collection methods ensure Carvel can recoup costs and enforce compliance with the Franchise Agreement.
Carvel also outlines specific conditions related to fee adjustments. For any fee that may be increased by no more than the Allowed Adjustment, the "Allowed Adjustment" in any calendar year will not exceed, at Carvel's option, (a) 50% of the fee that is in effect at the start of the calendar year or (b) the increase in the actual costs and expenses that Carvel or its affiliates incur to provide such goods or services to the franchisee.