Is a Carvel franchisee allowed to divert business from their Franchised Business?

Based on the 2025 Carvel Franchise Disclosure Document, Section 15.4 addresses restrictive covenants and defines what constitutes a "Competing Product." According to this section, a "Competing Product" includes any products or services that are the same as or similar to any of the Approved Products that Carvel franchisees are authorized to sell. This suggests that Carvel franchisees are restricted from offering products or services that directly compete with Carvel's approved product line.

This restriction likely aims to protect Carvel's brand integrity and prevent franchisees from diverting revenue away from the franchised business. By limiting the types of products and services a franchisee can offer, Carvel ensures that the franchisee focuses on promoting and selling Carvel's core offerings. This helps maintain consistency across all Carvel locations and prevents cannibalization of sales.

For a prospective Carvel franchisee, this means they cannot operate another business, or offer products or services within their Carvel franchise, that directly compete with Carvel's approved menu. Understanding this restriction is crucial for planning their business operations and ensuring compliance with the franchise agreement. Franchisees should seek clarification from Carvel regarding specific products or services that may be considered competitive to avoid potential conflicts.