When do the management advisory and consulting services agreements between Carvel and affiliated entities expire, and are there any renewal provisions?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
rior tax years.
Foreign income taxes arise from withholding taxes associated with payments of royalties and fees by international franchisees.
As of December 29, 2024 and December 31, 2023, the Company had no material unrecognized tax benefits.
As discussed in Note 1, the Company is included in the consolidated return of the Parent. The Parent files U.S., state, and local income tax returns in jurisdictions with varying statutes of limitation. The tax years after 2020 generally remain subject to examination by federal and most state tax
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the two management advisory and consulting services agreements between the Parent company and affiliated entities are set to expire in December 2025. The agreements are subject to certain renewal provisions, although the specific details of these provisions are not outlined in the provided excerpt.
These agreements involve Carvel's Parent company paying annual management fees to affiliated entities. For the fiscal years ending December 29, 2024, and December 31, 2023, these fees amounted to $3,305 and $3,235, respectively. These expenses are categorized within 'Other operating expense, net.'
For a prospective Carvel franchisee, the expiration and potential renewal of these agreements may indirectly impact the financial stability and operational strategies of the company. While the exact nature of the renewal provisions is not detailed, it is important for potential franchisees to understand how these agreements could affect the services and support Carvel provides, as well as the overall cost structure. Further clarification on the renewal terms and their potential impact on franchise operations should be sought from Carvel during the due diligence process.