Does Carvel's designation, pre-approval, or acceptance of a General Contractor render them liable for the General Contractor's performance?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We will designate or pre-approve one or more licensed and insured general contractors (a "General Contractor") that you must engage, at your own expense, to complete your buildout, unless we, in our sole discretion, agree in writing to accept a General Contractor that you propose.
Our designation, pre-approval, or acceptance of a General Contractor will not in any way be our endorsement of such General Contractor or render us liable for such General Contractor's performance. (Franchise Agreement, Section 6.1.A.)
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 59–74)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel designates or pre-approves General Contractors that franchisees must engage to complete their buildout at their own expense. However, Carvel may agree to accept a General Contractor proposed by the franchisee in writing at their sole discretion.
Importantly, Carvel's designation, pre-approval, or acceptance of a General Contractor does not constitute an endorsement of the contractor. More critically, Carvel is not liable for the General Contractor's performance. This means that if the General Contractor fails to perform adequately or causes damages, the franchisee bears the responsibility and risk, not Carvel.
This arrangement is typical in franchising, where franchisees are generally considered independent business owners responsible for their own operations and construction. Prospective Carvel franchisees should conduct thorough due diligence on any General Contractor, even if they are on Carvel's approved list, to ensure they are competent and reliable. Franchisees should also ensure they have adequate insurance coverage to protect themselves from potential liabilities arising from the General Contractor's work.