What is a Carvel franchisee required to do regarding the terms of the Site Agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
e suitability of the Proposed Location for your Franchised Business along with a site plan for the Proposed Location. We will provide you with our acceptance or non-acceptance of the Proposed Location within 15 days after you deliver the last item of materials we request, and our determination will be final. If we accept the Proposed Location as the Accepted Location, you must sign standard documentation we prepare, which includes a general release, to document the Accepted Location. Our acceptance of any Proposed Location is our agreement that the Proposed Location satisfies our minimum site
selection criteria only and will not be construed as a representation or warranty that the Franchised Business located at the Proposed Location will be successful.
5.4 Site Acquisition.
A. Acceptance and Execution of Site Agreement. You must deliver a copy of the signed lease, sublease, or other rental agreement for the location (the "Lease") or purchase agreement for the location (the "Purchase Agreement" and, collectively with the Lease, the "Site Agreement") to us with all material terms specified therein, and any other additional documents you were required to sign with the Site Agreement, either: (i) after we sign this Agreement if we have identified the Accepted Location before we sign this Agreement, or (ii) immediately following the date we accept the location after we sign this Agreement. We may charge you a Lease Documentation Late Fee if you fail to timely provide the Site Agreement within 15 days after its execution. The "Lease Documentation Late Fee" shall be $500 per month (or partial month) from the due date for providing the Site Agreement until the date it is delivered. Before you sign the Site Agreement, you must ensure that it meets the requirements of this Section 5.4. We will have the right, but not the obligation, to review your Site Agreement prior to its execution to verify its compliance with this Section 5.4.
B. Site Agreement Restrictions. If you execute a Site Agreement, (i) you may not create any obligations on our behalf, grant any rights adverse to our rights, or agree to any other term that is inconsistent with any term of this Agreement; (ii) you must duly and timely perform all terms under the Site Agreement; and (iii) except as otherwise provided in this Agreement, you may not assign, encumber, or transfer the Site Agreement, or sublet all or any part of the Accepted Location, without our prior written approval, which approval will not be unreasonably withheld. You must ensure that all Site Agreements comply with any terms set forth in the Manuals.
C. Preferred Lease Terms. 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;
(iii) a provision that provides that upon expiration or termination of the Lease, we will, without your or the landlord's further consent, have a continuing right of entry into the Franchised Business to remove Proprietary Products and any materials bearing the Marks;
(iv) a provision that provides that the Lease may not be modified or amended without our written consent which will not unreasonably be withheld, conditioned or delayed by us;
(v) a provision that allows you to offer or distribute product samples outside or over the counter of the Franchised Business, as applicable;
(vi) a provision that provides that if we assume your obligations and replace you as the lessee under the Lease or sign a new lease, and we later reassign the Lease or new lease to another franchisee, we will not be liable for any obligations to landlord under the Lease or new lease after the reassignment;
(vii) a provision, or a separate collateral assignment of lease, that provides that your landlord reserves to us the right, at our election, to take an assignment of the leasehold interest and to occupy the Accepted Location for the Franchised Business upon termination or expiration of this Agreement or default under the Lease; and
(viii) a provision that provides that your Franchised Business will have at least one designated parking space for curb-side pickup.
D. Site Agreement Modifications. You must submit a copy of any proposed modification, amendment, or renewal of the Site Agreement (a "Site Agreement Change") (along with a true and complete copy of the then-existing Site Agreement) to us for our review and approval prior to executing such documents, not less than 10 days prior to the proposed effective date of such modification, amendment, or renewal. Our review of the proposed Site Agreement Change will be limited to ensuring that it is compliant with the terms of this Agreement. Our acceptance of the Site Agreement Change shall not be unreasonably withheld and may be conditioned upon the inclusion of terms in the Site Agreement acceptable to us, including those provisions as specified in Section 5.4.C. (Preferred Lease Terms). If you renew a Lease or a Lease is extended by the landlord for a period of 12 months or more, we may require you to pay us our then-current lease renewal fee, which may be increased in any calendar year by no more than the Allowed Adjustment. We will notify you in writing whether we approve of the proposed Site Agreement Change. If approved and subsequently signed, you must provide us with a copy of the signed Site Agreement Change within 15 days after its execution. We may charge you a Lease Documentation Late Fee if you fail to timely provide the modified or renewed Site Agreement.
E. Subleases. We reserve the right, directly or through an affiliate, to master lease any location and then sublet the location to you. Concurrently, with the execution of the Franchise Agreement, you may enter into a sublease with us if an acceptable site has been identified and we are or will be the master lessee of such site.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee has several obligations regarding the Site Agreement (lease or purchase agreement for the location). The franchisee must deliver a copy of the signed Site Agreement, including all material terms and additional signed documents, to Carvel either after Carvel signs the Franchise Agreement (if the location is already accepted) or immediately after Carvel accepts the location. Failure to provide the Site Agreement within 15 days of execution may result in a Lease Documentation Late Fee of $500 per month (or partial month) until the document is delivered. Before signing the Site Agreement, the franchisee must ensure it meets the requirements outlined in Section 5.4 of the FDD. Carvel has the right, but not the obligation, to review the Site Agreement before execution to verify compliance.
If a Carvel franchisee executes a Site Agreement, they are prohibited from creating obligations on Carvel's behalf, granting rights adverse to Carvel's rights, or agreeing to terms inconsistent with the Franchise Agreement. The franchisee must also duly and timely perform all terms under the Site Agreement. Unless otherwise provided in the Franchise Agreement, the franchisee cannot assign, encumber, or transfer the Site Agreement, or sublet any part of the location, without Carvel's prior written approval, which will not be unreasonably withheld. All Site Agreements must comply with terms set forth in Carvel's Manuals.
Carvel franchisees must use commercially reasonable efforts to include certain preferred lease terms in all Leases, unless Carvel agrees otherwise in writing. These terms include provisions that require the landlord to provide Carvel with copies of any default notices, grant Carvel the right to cure defaults, and allow Carvel certain rights upon expiration or termination of the Franchise Agreement or default under the Lease. These rights include the ability to enter and operate the business, assume the franchisee's interests under the Lease, and assign or sublet the premises. The lease should also allow Carvel to remove proprietary products and materials upon expiration or termination and prevent modification or amendment without Carvel's written consent. Additionally, the lease should allow the franchisee to offer product samples and ensure that Carvel is not liable for obligations to the landlord if Carvel reassigns the lease to another franchisee after assuming the original franchisee's obligations.
Furthermore, the Carvel franchisee must submit any proposed modification, amendment, or renewal of the Site Agreement to Carvel for review and approval at least 10 days before the proposed effective date. Carvel's review is limited to ensuring compliance with the Franchise Agreement, and approval will not be unreasonably withheld but may be conditioned on including terms acceptable to Carvel, particularly those in Section 5.4.C (Preferred Lease Terms). If a Lease is renewed or extended for 12 months or more, Carvel may require the franchisee to pay a lease renewal fee, which can be increased annually by no more than the Allowed Adjustment. The franchisee must provide Carvel with a copy of the signed Site Agreement Change within 15 days of execution, and failure to do so may result in a Lease Documentation Late Fee. Carvel also reserves the right to master lease any location and sublet it to the franchisee.