Can a Carvel franchisee terminate the Franchise Agreement for any grounds permitted by state law?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
| Section in | ||
|---|---|---|
| Franchise | ||
| Provisions | Agreement | Summary If you do not meet these conditions by, and you continue to operate after, the expiration date of the Franchise Agreement, the Franchise Agreement will be extended on a month-to-month basis until such time as (i) the conditions above are satisfied, or (ii) we notify you that the Franchise Agreement is terminated. |
| d. Termination by you | FA: 17.1 | Not applicable, except franchisees may terminate for any grounds permitted by state law. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 84–91)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee has limited options for terminating the Franchise Agreement. Specifically, Carvel franchisees may terminate the agreement based on any grounds permitted by state law. This means that the franchisee's right to terminate is not absolute but is subject to the laws of the state in which they operate their franchise.
This provision is important for prospective franchisees because it means that their ability to terminate the franchise agreement will depend on the specific laws of their state. Some states may have laws that provide more protection to franchisees, while others may have laws that are more favorable to franchisors. Therefore, it is important for prospective franchisees to consult with an attorney to understand their rights under state law.
It is also important to note that this is the only listed way in the FDD that a franchisee can terminate the agreement. Carvel does not allow for termination by the franchisee for any other reason. This is a fairly standard clause in franchise agreements, as it protects the franchisor from franchisees who may want to terminate the agreement for reasons that are not legally justifiable.