What are Carvel franchisees required to do if they receive a notice of revocation of approval for a supplier?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
If you receive a notice of revocation of approval, you agree to cease purchasing or leasing the formerly-approved Goods or any Goods from the formerly-approved Supplier and you must dispose of your remaining inventory of the formerly-approved Goods as we direct.
If we revoke approval of a formerly-approved Approved Product that you have been selling to customers or service that you have been offering to customers, you must immediately discontinue offering the service and may continue to sell the product only from your existing inventory for up to 30 days following our disapproval.
We have the right to shorten this period if, in our opinion, the continued sale of the product would prove detrimental to our reputation.
After the 30-day period, or such shorter period that we may designate, you must dispose of your remaining formerly-approved inventory as we direct.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, if a franchisee receives a notice of revocation of approval for a supplier, they must immediately stop purchasing or leasing the formerly-approved goods or any goods from the formerly-approved supplier. The franchisee is also required to dispose of any remaining inventory of the formerly-approved goods as directed by Carvel.
If Carvel revokes approval of a formerly-approved product that the franchisee has been selling or a service that they have been offering, the franchisee must immediately discontinue offering the service. They may continue to sell the product only from their existing inventory for up to 30 days following the disapproval.
Carvel retains the right to shorten this 30-day period if they believe that the continued sale of the product would be detrimental to their reputation. After the 30-day period, or the shorter period designated by Carvel, the franchisee must dispose of any remaining formerly-approved inventory as directed by Carvel. This ensures that Carvel maintains control over the quality and consistency of products and services offered under its brand name and protects its reputation.
This requirement is fairly standard in franchising, as franchisors need to ensure brand consistency and quality control. The franchisee bears the risk of inventory obsolescence if a supplier is de-approved, highlighting the importance of relying on Carvel-approved suppliers.