Does the Carvel franchise agreement require franchisees to waive reliance on representations made in the FDD?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
onducted an independent investigation of the business contemplated by this Agreement, recognize that it involves business risks, and recognize that making a success of a venture is largely dependent on your own business abilities; (ii) no assurance or warranty, express or implied, has been given to you by us or any of our affiliates as to the potential success of any business contemplated by this Agreement or the profits that may be achieved; (iii) there are no promises, commitments, "side deals," options, rights of first refusal, or other rights or obligations in connection with this Agreement except as expressly provided for in this Agreement; and (iv) the terms and covenants in this Agreement are reasonable and necessary for us to maintain our high standards of quality and service, as well as the uniformity of those standards at each Business, and to protect and preserve the goodwill of the Marks.
- C. No Reliance on Contrary Representations. You have no knowledge of any representations made about the franchise opportunity by us, our affiliates, or any of our or their officers, directors, owners, or agents that are contrary to the statements made in our FDD or to the terms and conditions of this Agreement. You are not relying on any representations or warranties, express or implied, furnished by us or our representatives other than those expressly set forth in this Agreement and the FDD.
- D. Financial Performance Representations. Except as may be stated in the FDD, neither we, nor any of our affiliates, nor any of our or our affiliates' officers, agents, employees, or representatives have made any representation to you, express or implied, as to the historical revenues, earnings, or profitability of any Business or the anticipated revenues, earnings, or profitability of the business subject to the license or any other business operated by us, our licensees, our franchisees, or our affiliates. Any information you have acquired from other franchisees regarding their sales, profits or cash flows is not information obtained from us, and we make no representation about that information's accuracy.
- 21.3 No Waiver or Disclaimer of Reliance in Certain States. The following provision applies only to franchisees and Franchised Businesses that are subject to the state franchise disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin:
**No statement, questionnaire, or acknowledgement signed or agreed to by you in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by us, any franchise seller, or any other person acting on behalf of us.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the franchise agreement stipulates that franchisees acknowledge they are not relying on any representations or warranties outside of what is expressly stated in the agreement and the FDD. Specifically, franchisees acknowledge they have no knowledge of any representations made that contradict the FDD or the agreement's terms. This acknowledgement confirms the franchisee's understanding that their decision is based solely on the documented information provided by Carvel. However, this acknowledgement does not apply to franchisees subject to state franchise disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin.
For franchisees in the listed states, the FDD states that no statement or acknowledgement can waive claims under applicable state franchise law, including fraud in the inducement, or disclaim reliance on any statement made by Carvel or its representatives. This provision supersedes any other conflicting term in any document executed in connection with the franchise. This ensures that franchisees in these states retain their legal rights and protections under state franchise laws, regardless of any acknowledgements made in the franchise agreement.
Furthermore, Carvel's FDD includes a Franchisee Disclosure Acknowledgement. However, this acknowledgement is not to be completed by franchisees if the offer or sale of the franchise is subject to the state franchise disclosure laws in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. This acknowledgement is also not to be signed if the franchise is to be operated in, or the franchisee is a resident of, Maryland. This acknowledgement aims to confirm that the franchisee has not received any unauthorized or untrue statements and understands the limitations on claims related to their franchise.
In summary, while Carvel's franchise agreement includes acknowledgements regarding reliance on representations, these acknowledgements are limited and do not apply to franchisees in certain states with specific franchise disclosure laws. This ensures that franchisees in those states retain their rights and protections under state law, while franchisees in other states are bound by the acknowledgements made in the agreement.