Are delivery fees included in Carvel's definition of Net Sales?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
Net Sales includes monies, gift card redemptions, or credit generated by or received from (i) the sale of Approved Products or tangible property of every kind and nature, promotional or otherwise, anywhere and (ii) services performed from, at, or in connection with the Franchised Business, including (x) offpremises services (such as catering and delivery), (y) on-premises services (such as games, gambling machines, or third-party advertising within the Franchised Business), or (z) any other services or activities that use either the System, the Marks, or products that are the same as or similar to the Approved Products. The foregoing list is not intended to provide approval for such activities, which may be conducted only if approved. Unless we specify otherwise in writing, Net Sales shall include all ancillary charges or fees, including delivery fees and other service charges,
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, delivery fees are generally included in the calculation of Net Sales. Net Sales encompass all revenues generated by the Franchised Business, whether in cash, credit, or other forms of exchange. This includes revenues from the sale of approved products and services performed at or in connection with the Franchised Business.
Specifically, the definition of Net Sales includes monies or credit received from off-premises services like catering and delivery. The FDD states that unless Carvel specifies otherwise in writing, Net Sales will include all ancillary charges or fees, including delivery fees and other service charges.
This means that Carvel franchisees must pay royalty fees and advertising contributions based on total revenue, which includes delivery fees. However, Net Sales does not include items such as sales tax, refunds, or employee meals.