If a Carvel franchisee fails to distinguish their Franchised Business from its former appearance after termination, what administrative fee will be charged by Carvel?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, if a franchisee fails to make the required changes to distinguish their Franchised Business from its former appearance after the termination of the franchise agreement, Carvel has the right to enter the location and make those changes on the franchisee's behalf.
In this case, the franchisee is responsible for covering all costs and expenses incurred by Carvel or its affiliates in making these changes. Additionally, Carvel will charge an administrative fee, which is equal to 15% of the total costs and expenses that Carvel or its affiliates incurred. Interest will also be charged on these costs from the date of demand.
This policy ensures that terminated franchisees do not continue to benefit from Carvel's brand recognition and trade dress after their franchise agreement ends. It also provides Carvel with a mechanism to recover expenses associated with correcting any lingering brand confusion caused by a former franchisee's non-compliance.