If the transferee in a Carvel Control Transfer has affiliates, do those affiliates need to meet any requirements?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
If the transferee, its affiliates, or any of its directors, officers, shareholders, partners, members, or managers owns an interest in another Business or another franchise licensed by one of our affiliates, those individuals or Entities must (i) at the time of the Transfer request or the Transfer closing, not be in default in any material respect under any agreement with us, any of our affiliates, or any suppliers, (ii) during the previous two years, not have been in default in any material respect under any agreement with us, our affiliates, or any suppliers without curing such default within the applicable cure period, and (iii) in our sole judgment, have been approved to develop and operate additional franchises.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, if the transferee, its affiliates, or any of its directors, officers, shareholders, partners, members, or managers owns an interest in another business or another franchise licensed by one of Carvel's affiliates, certain conditions must be met. These individuals or entities must not be in default in any material respect under any agreement with Carvel, its affiliates, or any suppliers at the time of the transfer request or closing.
Furthermore, during the previous two years, they must not have been in default in any material respect under any agreement with Carvel, its affiliates, or any suppliers without curing such default within the applicable cure period. Finally, in Carvel's sole judgment, they must have been approved to develop and operate additional franchises.
These requirements ensure that any affiliated entities associated with the transferee are in good standing with Carvel and its related businesses, reducing the risk of potential conflicts or operational issues that could arise from a transfer to a party with a problematic business history. This protects the Carvel brand and the interests of other franchisees.