By what date must a Carvel franchisee furnish a profit and loss statement each year?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
On or before February 1st of each year (or such other date specified by us in the Manuals or otherwise in writing, which may be by email or other electronic communications), you must furnish to us a statement of the profit and loss of the Franchised Business for the last fiscal year and a balance sheet as of the end of the last fiscal year, prepared in accordance with our requirements and certified by you to be true and correct.
We have the right
to demand audited financial statements if a financial-related default has occurred under this Agreement within the last calendar year.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, franchisees are required to submit a profit and loss statement for their franchised business to Carvel on or before February 1st of each year. This statement must cover the last fiscal year and include a balance sheet as of the end of that fiscal year. The financial statements must be prepared according to Carvel's requirements and certified by the franchisee as true and correct.
This requirement ensures that Carvel has access to the financial performance data of each franchise location. This allows Carvel to monitor the overall health of the franchise system, assess individual franchisee performance, and potentially identify areas where franchisees may need support or assistance.
It's important to note that Carvel retains the right to request audited financial statements if a financial-related default has occurred under the Franchise Agreement within the last calendar year. Additionally, Carvel may specify a different date for submitting these statements in the Manuals or in writing, which could include email or other electronic communications. Franchisees should stay informed of any such changes to ensure compliance.
Beyond the annual profit and loss statement, Carvel also requires franchisees to submit copies of all tax returns (federal, state, and local income tax returns) relating to the franchised business or the franchisee entity, within 90 days of Carvel's request. Franchisees must also maintain accurate and complete financial records for at least 3 years, and these records must not be commingled with records from other businesses.