What is the maximum fee Carvel will charge for insufficient funds?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
If there are insufficient funds in your account to cover our draft, we will charge you a fee that will not exceed 110% of our or our affiliates' actual costs and expenses related to the incident (including any bank return fees or other charges).
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We may be limited in the amount of the Insufficient Funds Fee we may charge you as described in Item 6 of this Disclosure Document. The Minnesota Department of Commerce requires us to disclose to you that, currently, the highest such fee permitted under Minnesota Statute 604.113 is $30.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to the 2025 Carvel FDD, if a franchisee's account has insufficient funds to cover a draft, Carvel will charge a fee. This fee will not exceed 110% of Carvel's or its affiliates' actual costs and expenses related to the incident. This includes any bank return fees or other charges they incur.
For a prospective Carvel franchisee, this means that if a payment to Carvel is returned due to insufficient funds, they will be responsible for covering not only the original payment amount but also a fee to cover Carvel's expenses. This fee is capped at 110% of Carvel's costs, preventing excessive charges.
However, the FDD also notes a Minnesota addendum that may limit the insufficient funds fee. The Minnesota Department of Commerce requires Carvel to disclose that the highest such fee permitted under Minnesota Statute 604.113 is $30. This means that for Carvel franchisees in Minnesota, the insufficient funds fee may be capped at $30, regardless of Carvel's actual costs and expenses.