What counts towards meeting the minimum advertising expenditure obligation for a Carvel franchise?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. | As incurred | If you renew a lease or a lease is extended by the landlord for a period of 12 months or more, you must obtain our approval of the lease and, in our sole discretion, pay this fee, which we may change in any year by no more than the Allowed Adjustment. Our review of the lease will be limited to determining whether it complies with the Franchise Agreement. We may change this fee in any year by no more than the Allowed Adjustment. |
| Lease Documentation Late Fee | $500 per month (or partial month) until delivered. | As incurred | We may charge you this fee if you fail to provide us with a signed copy of any lease or a modification, amendment, or renewal of a lease within 15 days after its execution. The fee is payable for each month or partial month after the deadline, until you provide the documentation. |
| Relocation Fee | 10% of the then- current Initial Franchise Fee. | Before your relocation | If you relocate to a new site that we have accepted, you must pay the Relocation Fee. |
| Relocation Extension Fee | $1,500 per year that the term is extended. | Before we sign relocation Franchise Agreement | If you relocate to a new site and we agree to extend the term of your Franchise Agreement (or enter into a new Franchise Agreement) to match the term of your new lease, you must pay the Relocation Extension Fee in addition to the Relocation Fee. |
| Refresh/ Remodel Site Survey and Design Fee | Our then-current fee. Currently, $1,200 to $6,000 depending on the scope of the required changes. | As incurred | You must refresh your Shoppe every five years and must remodel your Shoppe every ten years to meet our then-current Standards. We may require you to pay us, our affiliates, or our designee this fee to inspect your Shoppe and produce a site survey and/or design plan that will comply with these |
| Type of Fee1, 4 | Amount advertising (1% of Net Sales for Ice Cream Trucks or Co-Branded Shoppes) | Date Due | Remarks collectively exceed 5% of your Net Sales. See Item 11 for what will count towards meeting your obligation. If you fail to make the minimum advertising expenditures, we may do so on your behalf and you must reimburse us for our expenses. We may also elect to collect all or a portion of the Local Marketing Obligation from you and (i) contribute it to the Ad Fund, (ii) conduct national, regional, or local advertising, (iii) spend it on local advertising, or (iv) contribute it to your Advertising Cooperative. |
Source: Item 6 — OTHER FEES (FDD pages 31–42)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the amount of advertising expenditures required is 1% of Net Sales for Ice Cream Trucks or Co-Branded Shoppes. Item 11 of the FDD outlines what specific expenditures will count towards meeting this obligation. If a franchisee fails to meet the minimum advertising expenditure, Carvel has the right to make those expenditures on the franchisee's behalf, and the franchisee must reimburse Carvel for those expenses. Carvel can also collect all or a portion of the Local Marketing Obligation from the franchisee and use it in various ways, including contributing it to the Ad Fund, conducting advertising at different levels (national, regional, or local), spending it on local advertising, or contributing it to the franchisee's Advertising Cooperative.
This means that Carvel franchisees operating Ice Cream Trucks or Co-Branded Shoppes must spend at least 1% of their net sales on advertising. If they don't, Carvel can step in and handle the advertising, but the franchisee will have to pay Carvel back. Additionally, Carvel has significant control over how local marketing funds are used, giving them flexibility in directing advertising efforts.
Prospective franchisees should carefully review Item 11 of the 2025 FDD to fully understand what specific advertising activities and expenses qualify towards meeting the minimum advertising expenditure requirement. They should also inquire about Carvel's typical approach to managing local marketing obligations and how those funds are allocated to ensure they align with their business goals.