For Carvel franchise disputes related to non-competition covenants, which state's laws apply?

According to Carvel's 2025 Franchise Disclosure Document, disputes concerning non-competition covenants will be governed by the laws of the state in which the Carvel Shoppe is located. This is an exception to the general rule that Georgia law applies to all other disputes arising from the Franchise Agreement.

This means that if a Carvel franchisee is involved in a legal dispute with Carvel regarding a non-compete clause, the laws of the state where their specific Carvel location operates will be used to interpret and enforce the agreement. Non-competition covenants typically restrict a franchisee's ability to operate a similar business during and after the franchise agreement term, within a certain geographic area.

The application of local state laws to non-compete disputes is a significant consideration for prospective Carvel franchisees. State laws regarding the enforceability and scope of non-compete agreements can vary widely. Some states may be more lenient in enforcing such covenants, while others may have stricter requirements or outright prohibitions. Therefore, it is essential for potential franchisees to understand the non-compete laws in their specific state and how they might affect their rights and obligations under the Carvel Franchise Agreement.