If a Carvel franchisee's business is not open and operating, can they transfer the franchise?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We have sole and absolute discretion to withhold our consent, except as otherwise provided in Sections 16.4 through 16.7.
Without limiting the foregoing, we will not consent to a Transfer, and we are under no obligation to do so, if (i) your Franchised Business is not open and operating; or (ii) the Transfer would cause a transferee or its owners to breach another agreement (whether or not with us).
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee cannot transfer their franchise if the Franchised Business is not open and operating. Carvel retains sole and absolute discretion to withhold consent for a transfer under such circumstances.
This stipulation protects Carvel by ensuring that new franchisees take over viable, operational businesses. Transferring a non-operational franchise could negatively impact the brand's reputation and the success of future franchisees. By preventing such transfers, Carvel maintains control over the quality and operational status of its franchise network.
This requirement is a fairly common practice in franchising. Franchisors typically want to ensure that any transfer of ownership involves a functioning business to maintain brand standards and minimize potential disruptions. Prospective Carvel franchisees should be aware of this restriction, as it could affect their ability to exit the business if it is not yet operational.