Which items in the Carvel Disclosure Document provide more information about site selection and acquisition/lease for a standard franchise?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
tem 1, we have entered into a management agreement with GoTo Foods for it to provide certain support and services to Carvel franchisees. GoTo Foods may delegate certain of these responsibilities to CL, the previous franchisor of Carvel franchises, or other affiliates. However, we remain responsible for all of the support and services required under the Franchise Agreement.
1. Site Selection Review. We will review the location you select for your Shoppe and accept it if it meets our minimum site criteria, at which point it will become the Accepted Location. You may not acquire the Accepted Location until we have accepted it. If you and we have not agreed on an Accepted Location at the time we sign the Franchise Agreement, you must select a location that complies with our site selection criteria within a geographic area that we specify. For any proposed site, we may require you to obtain a site selection analysis from an Approved Supplier, which may include an analysis of such factors as traffic patterns, demographics, and competitors within the market, and provide us with a copy of this analysis. We estimate the cost for this site selection analysis will be $2,500 to $5,000. We consider the following factors in determining whether to accept sites: population density and demographics, traffic flow, pedestrian traffic counts, visibility, parking, access, household income, and local competition, including other Shoppes. There is no time limit for us to approve or disapprove of a site. (Franchise Agreement, Section 5.1)
While we may assist you in selecting a proposed site, we are not obligated to do so. We or our affiliates typically do not lease or sublease locations for Shoppes, but we may do so from time to time. (Franchise Agreement, Section 5.2)
We expect you to retain an independent expert to evaluate the suitability of a proposed site and to conduct your independent investigation of the site. We disclaim any responsibility for the suitability of the Accepted Location. Our acceptance of the site is based on the site satisfying our minimum site selection criteria only and will not be construed as a representation or warranty that
the Shoppe located at the Accepted Location will be successful. (Franchise Agreement, Section 5.3)
- 2. Site Agreement. You must deliver a copy of the signed lease, sublease, or other rental agreement for the location (the "Lease") or purchase agreement for the location (the "Purchase Agreement" and, collectively with the Lease, the "Site Agreement") to us with all material terms specified therein. You will be solely responsible for negotiation of the terms of the Site Agreement and performance under the Site Agreement. We will have the right, but not the obligation, to review your Site Agreement prior to its execution to verify its compliance with our requirements. (Franchise Agreement, Section 5.4)
- 3. Evaluate Co-branding and Hosted Express Shoppes. We will evaluate any request to (i) co-brand an Express Shoppe with another business, (ii) operate a Hosted Express Shoppe in a Host Facility, or (iii) change the Host Facility for a Hosted Express Shoppe, and you must obtain our consent in connection with your request.
- 4. General Contractor. We will designate or pre-approve one or more licensed and insured general contractors (a "General Contractor") that you must engage, at your own expense, to complete your buildout, unless we, in our sole discretion, agree in writing to accept a General Contractor that you propose. Our designation, pre-approval, or acceptance of a General Contractor will not in any way be our endorsement of such General Contractor or render us liable for such General Contractor's performance. (Franchise Agreement, Section 6.1.A.)
- 5. Architect. We will designate or pre-approve one or more licensed architects (an "Architect") that you must engage, at your own expense, to develop architectural plans, unless we, in our sole discretion, agree in writing to accept an Architect that you propose. Our designation, pre-approval, or acceptance of an Architect will not in any way be our endorsement of such Architect or render us liable for such Architect's performance or such Architect's compliance with professional design standards or adherence to local codes. You also must engage, at your expense, licensed engineers (e.g., mechanical, electrical, plumbing, or structural engineers), as necessary or appropriate. (Franchise Agreement, Section 6.2.A.(i))
- **6.
Source: Item 9 — Franchisee's Obligations (FDD pages 56–58)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Item 11 and Section 5 of Item 23 provide information regarding site selection and acquisition for a standard franchise. Item 11 states that Carvel will review the location selected by the franchisee and accept it if it meets their minimum site criteria, at which point it becomes the 'Accepted Location.' The franchisee cannot acquire the location until Carvel has accepted it. If an Accepted Location is not agreed upon when signing the Franchise Agreement, the franchisee must select a location that complies with Carvel's site selection criteria within a specified geographic area. Carvel may require a site selection analysis from an Approved Supplier, costing between $2,500 and $5,000. Carvel considers factors such as population density, traffic flow, visibility, parking, household income, and local competition when determining whether to accept a site. While Carvel may assist in selecting a site, they are not obligated to do so and typically do not lease or sublease locations. Carvel also expects the franchisee to retain an independent expert to evaluate the suitability of a proposed site and conduct their own investigation, disclaiming any responsibility for the site's suitability beyond meeting their minimum criteria.
Item 23, Section 5, outlines the requirements for site identification and acquisition. The franchisee must establish and operate the franchised business only at the Accepted Location and cannot conduct any other business from that location without prior written consent. If co-branding is desired, prior written consent is required. Sales of approved products using Carvel's trademarks are restricted to the Accepted Location, except for catering and delivery services. If Carvel consents to operations away from the Accepted Location, a separate agreement will be required, which may include limitations and different financial terms.
Carvel may assist in selecting a Proposed Location, but they are not obligated to do so, and franchisees should conduct their own investigation of any Proposed Location. If an Accepted Location is not agreed upon at the time of signing the Franchise Agreement, the franchisee must select a Proposed Location that meets Carvel's site selection criteria within the Site Selection Area. The franchisee must provide all requested materials to evaluate the suitability of the Proposed Location, including a site plan. Carvel will provide acceptance or non-acceptance within 15 days after receiving all requested materials, and their determination is final. If the Proposed Location is accepted, the franchisee must sign standard documentation, including a general release, to document the Accepted Location. Carvel's acceptance only indicates that the Proposed Location meets their minimum site selection criteria and does not guarantee the success of the franchised business at that location.