What is the Carvel franchisee's obligation regarding noncompliance with any Law?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following is added to the end of the "Summary" sections of Item 17(c), titled "Requirements for franchisee to renew or extend," and Item 17(m), entitled "Conditions for franchisor approval of transfer":
However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied.
- The following language replaces the "Summary" section of Item 17(d), titled "Termination by franchisee":
You may terminate the Franchise Agreement on any grounds available by law.
- The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice of law":
The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of State of New York.
NORTH DAKOTA ADDENDUM TO DISCLOSURE DOCUMENT
In recognition of the requirements of the North Dakota Franchise Investment Law, N.D. Cent. Code §§ 51-19-01 through 51-19-17, and the policies of the Office of State of North Dakota Securities Commission, the Disclosure Document for Carvel Franchisor SPV LLC for use in the State of North Dakota is amended as follows:
FRANCHISEE DISCLOSURE ACKNOWLEDGEMENT
THIS ACKNOWLEDGEMENT SHALL NOT BE COMPLETED BY YOU, AND WILL NOT APPLY, IF THE OFFER OR SALE OF THE FRANCHISE IS SUBJECT TO THE STATE FRANCHISE DISCLOSURE LAWS IN THE STATES OF CALIFORNIA, HAWAII, ILLINOIS, INDIANA, MARYLAND, MICHIGAN, MINNESOTA, NEW YORK, NORTH DAKOTA, RHODE ISLAND, SOUTH DAKOTA, VIRGINIA, WASHINGTON, OR WISCONSIN.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
Based on the 2025 Carvel Franchise Disclosure Document, there is no explicit section that details the Carvel franchisee's obligation regarding noncompliance with any law. However, the document does include addenda for New York and North Dakota that address franchisee rights under those states' laws. Specifically, the New York addendum states that all rights and causes of action arising in the franchisee's favor from the provisions of Article 33 of the General Business Law of the State of New York remain in force. Similarly, the North Dakota addendum acknowledges the requirements of the North Dakota Franchise Investment Law.
Additionally, the Franchisee Disclosure Acknowledgement states that the acknowledgement will not apply if the offer or sale of the franchise is subject to state franchise disclosure laws in certain states, including California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, or Wisconsin. This suggests that Carvel aims to comply with various state laws and regulations concerning franchising.
While the FDD does not directly address the franchisee's obligations regarding noncompliance with laws, it does emphasize adherence to specific state laws and regulations. A prospective franchisee should inquire with Carvel about the specific legal compliance obligations and potential liabilities associated with operating a Carvel franchise, including any training or support provided to ensure compliance with all applicable laws and regulations.