What is the maximum amount Carvel can charge for the Technology Fee, relative to their costs?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
The Technology Fee may be based on a percentage of Net Sales, fixed fees, and/or usage fees, provided that the fee collected will not exceed 110% of our or our affiliates' actual costs and expenses related to such products or services.
We may modify the Technology Fee and payment frequency from time to time.
We may replace or supplement other technology-related fees that we collect (such as the Ordering Support Fee) with the Technology Fee.
We will use the Technology Fee to defray our and our affiliates' costs of developing, implementing, upgrading, operating, maintaining, supporting, or providing any technology-related products, services, programs, systems, or platforms that we, in our sole discretion, deem appropriate.
We may add, delete, or otherwise modify the products, services, programs, systems, and platforms that are funded by the Technology Fee from time to time.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Technology Fee that Carvel may charge franchisees will not exceed 110% of Carvel's or its affiliates' actual costs and expenses related to the technology products or services provided. This fee is intended to cover the costs associated with developing, implementing, upgrading, operating, maintaining, supporting, or providing any technology-related products, services, programs, systems, or platforms that Carvel deems appropriate.
This means that for every dollar Carvel spends on providing technology-related services, they can charge franchisees up to $1.10. The Technology Fee may be based on a percentage of Net Sales, fixed fees, and/or usage fees. Carvel also retains the right to modify the Technology Fee and payment frequency over time and may replace or supplement other technology-related fees, such as the Ordering Support Fee, with the Technology Fee.
For a prospective Carvel franchisee, this implies that the Technology Fee could fluctuate based on the technology needs and investments made by Carvel. While the fee is capped at 110% of Carvel's costs, franchisees should still budget for potential increases or changes in the fee structure. It is important for franchisees to understand what specific technology products, services, programs, systems, and platforms are covered by the Technology Fee and how these may evolve during the franchise term. Franchisees should also inquire about the historical trends and projected future costs associated with the Technology Fee to better assess the financial implications.