What is the deadline for Carvel's Site Approval, as referenced in Section 6.5.A?

According to Carvel's 2025 Franchise Disclosure Document, the deadline for Site Approval (Section 6.5.A) varies. For some agreements, the deadline is 'Within 60 days after the Effective Date,' while for others, it's 'Within 150 days after the Effective Date.' In some cases, the Site Approval Deadline is marked as 'Not applicable.'

Specifically, Section 6.5.A states that franchisees must (i) identify the Accepted Location, (ii) obtain Carvel's acceptance of the Accepted Location, (iii) sign any required documentation, (iv) obtain Carvel's acceptance of a Lease, and (v) sign the accepted Lease or acquire ownership rights by the Site Approval Deadline. These discrepancies could be due to different types of Carvel franchises or different agreements offered within the same year.

Failure to meet the Site Approval Deadline can lead to consequences. Carvel may allow franchisees to request an extension before the deadline, potentially requiring a $2,500 extension fee and a general release. However, Carvel is not obligated to grant any extensions. If the franchisee fails to meet the Site Approval Deadline and does not cure the failure within 30 days after receiving notice from Carvel, Carvel may terminate the Franchise Agreement.

Prospective Carvel franchisees should clarify with the franchisor the specific Site Approval Deadline applicable to their franchise agreement to avoid potential penalties or termination of the agreement. Understanding the factors that determine the applicable deadline is crucial during the due diligence process.