What are some examples of costs that the Carvel Ad Fund may be used to cover?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the Ad Fund to meet the costs of administering, preparing, and conducting national, local, or regional advertising, promotional, or brand building programs of any kind, including the cost of (i) preparing and conducting television, radio, magazine, newspaper, and digital advertising campaigns and other public relations activities (including, but not limited to, for purposes of brand reputation management), (ii) employing public relations firms and advertising agencies to assist in these activities, and (iii) conducting other activities that are directly or indirectly designed to promote the System, its franchisees, and/or increase System sales, such as limited-time menu offerings, crew incentives, franchisee incentive and/or promotional programs, customized materials (e.g., cups), up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, mystery shop and shopper programs, brand websites and ordering platforms, brand applications, social media account administration and promotion, and in-shoppe equipment and technologies related to such marketing programs. We may use the Ad Fund to compensate us for the reasonable administrative costs and overhead we incur in activities related to advertising and promotional programs, including new product development; market research; preparing advertising and promotional materials; Digital Marketing (as defined below); working with public relations firms, advertising agencies, advertising placement services, and creative talent; reimbursing franchisee advisory council meeting expenses; developing and maintaining, and paying third parties for the development and maintenance of, internet sites, applications, and other equipment and technologies related to marketing programs.
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, the Ad Fund can cover a variety of advertising, promotional, and brand-building expenses. These include the costs associated with creating and running advertising campaigns across various media such as television, radio, magazines, newspapers, and digital platforms. The fund also supports public relations activities, including brand reputation management.
Carvel may use the Ad Fund to hire public relations firms and advertising agencies to assist with these activities. Additionally, the Ad Fund can finance activities designed to promote the Carvel system, its franchisees, and increase sales. Examples of such activities include limited-time menu offerings, crew incentives, franchisee incentive and promotional programs, customized materials like cups, up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, and mystery shopper programs.
Furthermore, the Ad Fund can be used for brand-related technologies and platforms, such as brand websites and ordering platforms, brand applications, and social media account administration and promotion. Carvel is also allowed to use the Ad Fund to cover reasonable administrative costs and overhead related to advertising and promotional programs. This includes expenses for new product development, market research, preparing advertising materials, digital marketing, and compensating advertising agencies and creative talent. The Ad Fund can also reimburse franchisee advisory council meeting expenses and cover the costs of developing and maintaining internet sites, applications, and other marketing-related technologies.
In Fiscal Year 2024, Carvel allocated the Ad Fund in the following manner: 16% was spent on media placement, 35% on production and agency fees, 10% on guest response programs and menu innovation projects, 36% on brand and category marketing expenses, and 3% on administrative expenses. Carvel does not have an advertising council composed of franchisees that is involved in decision-making on advertising issues, but the Carvel Franchise Advisory Council provides suggestions on advertising issues.