What is the definition of a 'Remodel' for a Carvel franchise, and when is it required?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
Within six months after the tenth and (if you are entering into a Renewal Term) twentieth anniversaries of the Opening Date, you must, at your sole expense and in accordance with our then-current Standards and directives, remodel, refurbish, renovate, and modernize the Franchised Business to meet our then-current operational, branding, and architectural design Standards (a "Remodel").
Generally, a Remodel may include all of the modifications, upgrades, and replacements required in a Refresh, plus other more extensive alterations to your Franchised Business' layout, structure, or design, such as redesigning the interior and exterior appearance and interior layout of the Franchised Business or adding a drivethru to a Franchised Business.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a 'Remodel' involves more extensive alterations to the franchise's layout, structure, or design, potentially including redesigning the interior and exterior appearance, interior layout, or adding a drive-thru. Carvel requires franchisees to conduct a Remodel within six months after the tenth and, if applicable, the twentieth anniversaries of the franchise's opening date. This must be done at the franchisee's sole expense and in accordance with Carvel's then-current standards and directives.
Before starting a Remodel, Carvel, its affiliate, or its designee will inspect the franchise location and create a site survey or design plan that complies with their current standards. Carvel may charge a fee for this service, which can increase annually by no more than the Allowed Adjustment. All plans, designs, furniture, fixtures, equipment, and décor must be approved in writing by Carvel and conform to their standards and applicable laws. If required, these items must be purchased from approved suppliers designated or approved in writing by Carvel.
The FDD specifies that franchisees must comply with specific sections of the Franchise Agreement related to leasehold improvements, architectural plans, and construction, inspection, and government approvals for each Remodel. Carvel emphasizes that a Remodel may require a significant capital investment from the franchisee. Franchisees are responsible for covering all capital expenditures needed to meet these requirements, even if those expenditures cannot be amortized over the remaining term of the agreement.
This requirement ensures that Carvel franchises maintain a consistent brand image and operational standards over time. However, it also represents a potentially significant financial obligation for franchisees, who must be prepared to invest in these periodic upgrades to remain compliant with the franchise agreement.