What must a Carvel franchisee do to ensure the landlord provides notice of default?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
You must use commercially reasonable efforts to ensure that all Leases include, unless we agree otherwise in writing:
(i) a provision which requires the landlord concurrently to provide us with a copy of any written notice of breach or default under the Lease sent to you, and which grants to us the right (but not the obligation) to cure any defaults under the Lease within a reasonable time (not to exceed 15 days for monetary defaults and 30 days for non-monetary defaults);
(ii) a provision that provides that upon the expiration or termination of this Agreement or upon your default under the Lease or under this Agreement, we will, without your or the landlord's further consent, have (a) a continuing right of entry into the Franchised Business, (b) the right to operate a Business at the Accepted Location, (c) the right, but not the obligation, to assume your interests under the existing terms, conditions and covenants of the Lease, and (d) should we assume your position under the Lease, the right to assign the Lease or sublet the premises to a third party which will operate a Business at the location;
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to the 2025 Carvel Franchise Disclosure Document, a franchisee must make commercially reasonable efforts to ensure that all leases include a provision requiring the landlord to provide Carvel with a copy of any written notice of breach or default sent to the franchisee. This is a critical step for franchisees to protect their business and relationship with Carvel.
This provision also grants Carvel the right, but not the obligation, to cure any defaults under the lease within a reasonable time. The timeframe provided is not to exceed 15 days for monetary defaults and 30 days for non-monetary defaults. This cure period allows Carvel to step in and resolve the issue, potentially preventing the franchisee from losing their location.
Furthermore, the lease agreement should include provisions that, upon the expiration or termination of the Franchise Agreement or the franchisee's default under the lease or Franchise Agreement, Carvel has the right to enter the franchised business, operate a business at the location, and assume the franchisee's interests under the lease. Carvel also has the right to assign the lease or sublet the premises to a third party who will operate a Carvel business at the location. These stipulations ensure Carvel's continued operation and brand presence even if an individual franchise fails.