If a Carvel franchisee fails to make required changes to distinguish the Franchised Business after termination, what right does Carvel have?
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 necessary changes to differentiate their former Carvel location after the franchise agreement is terminated, Carvel has the right to enter the location and make those changes themselves. This is in addition to any other legal remedies Carvel may pursue.
Specifically, Carvel can enter the 'Accepted Location' (the physical site of the former franchise) and modify it to remove any branding or elements that would associate it with Carvel. The franchisee is then responsible for covering all costs and expenses Carvel incurs during this process.
Furthermore, Carvel charges an administrative fee on top of the costs and expenses for making these changes. This fee is equal to 15% of the total costs and expenses. The franchisee is also responsible for paying interest on these amounts from the date Carvel demands payment. This provision ensures that Carvel can quickly and effectively remove its branding from a former franchise location while shifting the financial burden of doing so onto the terminated franchisee.