What is the condition for a Carvel franchisee to meet before the Renewal Term begins?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Conditions for Renewal Term. If we approve your Application, you must:
- (i) Agree in writing before the Renewal Term begins that you will make the significant capital expenditures necessary to complete a Remodel (as defined in Section 12.6.B. (Remodel)) within six months after the Renewal Term begins.
- (ii) Sign and return our then-current form of franchise agreement (the "Renewal Agreement") within 30 days after we deliver it to you and pay a renewal fee equal to 20% of the amount of the then-current Initial Franchise Fee. You agree that the Renewal Agreement may contain terms that differ materially from this Agreement.
- (iii) Sign a general release in a form we prepare, releasing us and our parents, subsidiaries, and affiliates and the respective directors, officers, owners, shareholders, partners, members, managers, representatives, employees, agents, attorneys, contractors, predecessors, successors, heirs and assigns of each of the foregoing (in their corporate and individual capacities) (collectively, the "Released Parties"), from all claims you may have against the Released Parties as of the date of the Renewal Agreement. Your Owners must also sign the general release required in the previous sentence. Released Parties is not intended to include suppliers or distributors to you that are not affiliated with us and are not acting as our agent.
- (iv) Secure the right from your landlord to continue operating at the Accepted Location for the remainder of the Renewal Term. Alternatively, we may require you to relocate your Franchised Business if we find that the Accepted Location does not meet our then-current standards at the time we consider your Application.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, if Carvel approves a franchisee's application for a renewal term, the franchisee must fulfill certain conditions before the renewal term can begin. The franchisee must agree in writing to make significant capital expenditures necessary to complete a remodel within six months after the Renewal Term begins.
Additionally, the franchisee is required to sign and return Carvel's then-current form of franchise agreement, known as the "Renewal Agreement," within 30 days of receiving it. They must also pay a renewal fee equivalent to 20% of the then-current Initial Franchise Fee. The FDD notes that the Renewal Agreement may contain terms that differ materially from the original agreement.
Finally, the franchisee and their Owners must sign a general release in a form prepared by Carvel, which releases Carvel and its affiliates from all claims as of the date of the Renewal Agreement. Securing the right from the landlord to continue operating at the current location for the renewal term is also required; otherwise, Carvel may require the franchisee to relocate if the current location doesn't meet their standards at the time of the application.