What is the Carvel franchisee's obligation if the Support Services Agreement is terminated or expires?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
18. OBLIGATIONS ON EXPIRATION OR TERMINATION
- 18.1 General Obligations. On expiration or termination of this Agreement for any reason, you must:
- A. Immediately cease using the System, including the Marks and any confusingly similar names, marks, commercial symbols, systems, insignia, symbols, color schemes, trade dress, designs, procedures, domain names, and methods. If you fail or refuse to make changes to the Franchised Business required to distinguish the Franchised Business from its former appearance, we have the right, in addition to all other remedies, to enter the Accepted Location and make the required changes on your behalf, and you must pay to us all costs and expenses we or our affiliates incur in making the changes, including interest from the date of demand, plus an administrative fee in an amount equal to 15% of the costs and expenses that we or our affiliates incur.
- B. Immediately return to us: (i) all hard copies and electronic copies (capable of being returned) of the Confidential Information and Trade Secrets, including the Manuals, together with
all copies of any of them; and (ii) all other manuals, records, files, instructions, correspondence and other materials relating to the operation of the Franchised Business ("Other Materials"). If you have on your computer systems, your e-mail accounts, or other digital storage systems or services copies of the Confidential Information, Trade Secrets, and/or Other Materials, you must immediately erase these copies. You must provide us with a certification attesting to the fact that all copies of the Confidential Information, Trade Secrets, and Other Materials in your control or the control of your officers, directors, owners, employees, agents, and representatives have been returned or destroyed in accordance with this Section.
- C.
Within 5 days after expiration or termination, pay us and our affiliates the full amount you owe us and them.
- D.
Immediately stop identifying yourself in any way as our franchisee or former franchisee.
- E.
Immediately comply with the restrictive covenants in Section 15 (Confidential Information; Restrictive Covenants).
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, upon the expiration or termination of the Support Services Agreement, the franchisee has several obligations. The franchisee must immediately cease using the Carvel system, including all marks, symbols, color schemes, trade dress, designs, procedures, domain names, and methods. If the franchisee does not make the required changes to distinguish the Franchised Business from its former appearance, Carvel has the right to enter the location and make the changes, with the franchisee responsible for all costs and expenses, including a 15% administrative fee and interest.
Additionally, the franchisee must return all hard and electronic copies of confidential information and trade secrets, including manuals and other materials related to the business operation. This includes erasing any digital copies from computer systems, email accounts, or other storage systems. The franchisee must also provide a certification attesting that all copies of confidential information and other materials have been returned or destroyed.
Within five days of the expiration or termination, the franchisee must pay Carvel and its affiliates the full amount owed. The franchisee must also immediately stop identifying as a Carvel franchisee or former franchisee and comply with the restrictive covenants related to confidential information. These obligations ensure that upon termination or expiration, the franchisee disassociates entirely from the Carvel brand and returns all proprietary information.