Does GoTo Foods guarantee Carvel's obligations under the Franchise Agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
As reflected in Item 1, GoTo Foods will be providing required support and services to franchisees under a management agreement with us. Attached as Exhibit A are the audited financial statements of GoTo Foods as of and for the fiscal years December 29, 2024 and December 31, 2023. These financial statements are being provided for disclosure purposes only. GoTo Foods is not a party to the Franchise Agreement or other agreement we sign with franchisees nor does it guarantee our obligations under the Franchise Agreement or other agreements we sign with franchisees.
For value received, GoTo Foods Systems LLC, a Delaware limited liability company (the "Guarantor"), located at 5620 Glenridge Drive NE, Atlanta, Georgia 30342, absolutely and unconditionally guarantees to assume the duties and obligations of Carvel Franchisor SPV LLC, located at 5620 Glenridge Drive NE, Atlanta, Georgia 30342 (the "Franchisor"), under its franchise registration in each state where the franchise is registered, and under its Franchise Agreement identified in its 2025 Franchise Disclosure Document, as it may be amended, and as that Franchise Agreement may be entered into with franchisees and amended, modified or extended from time to time. This Guarantee continues until all such obligations of the Franchisor under its franchise registrations and the Franchise Agreement are satisfied or until the liability of Franchisor to its franchisees under the Franchise Agreement has been completely discharged, whichever first occurs. The Guarantor is not discharged from liability if a claim by a franchisee against the Franchisor remains outstanding. Notice of acceptance is waived. The Guarantor does not waive receipt of notice of default on the part of the Franchisor. This guarantee is binding on the Guarantor and its successors and assigns.
Source: Item 21 — Financial Statements (FDD page 99)
What This Means (2025 FDD)
According to the 2025 Carvel Franchise Disclosure Document, GoTo Foods does not guarantee Carvel's obligations under the Franchise Agreement. Item 21 states that while GoTo Foods provides support and services to Carvel franchisees under a management agreement, it is not a party to the Franchise Agreement and does not guarantee Carvel's obligations. However, GoTo Systems does guarantee Carvel's obligations under the Franchise Agreement.
This distinction is important for prospective franchisees because it clarifies which entity is ultimately responsible for fulfilling the franchisor's obligations. While GoTo Foods provides support services, the financial responsibility for upholding the Franchise Agreement falls on GoTo Systems.
Additionally, Exhibit A includes a Guarantee of Performance signed by GoTo Foods Systems LLC, which guarantees the duties and obligations of Carvel Franchisor SPV LLC under the Franchise Agreement. This guarantee remains in effect until all obligations are satisfied or the liability of Carvel to its franchisees has been completely discharged.