By how much can Carvel increase the Late Reporting Fee in any calendar year?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
The Late Reporting Fee is currently $50 per week that such report, statement, or return is late.
We may increase the Late Reporting Fee in any calendar year by no more than the Allowed Adjustment.
For any fee specified in this Agreement that may be increased by no more than the Allowed Adjustment, the "Allowed Adjustment" in any calendar year will not exceed, at our option, (a) 50% of the fee that is in effect at the start of the calendar year or (b) the increase in the actual costs and expenses that we or our affiliates incur to provide such goods or services to you.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Late Reporting Fee is currently $50 per week for submitting reports, statements, or returns late. Carvel has the right to increase this fee each calendar year, but the increase is limited to the "Allowed Adjustment".
The "Allowed Adjustment" is defined as either (a) 50% of the Late Reporting Fee in effect at the start of the calendar year, or (b) the increase in Carvel's actual costs and expenses to provide such goods or services to the franchisee; Carvel can choose either option. For example, if Carvel chooses the percentage option, the maximum increase to the $50 Late Reporting Fee would be $25 (50% of $50).
This means that the Late Reporting Fee could increase annually, potentially adding up to a substantial amount over the term of the franchise agreement. It is important for a prospective Carvel franchisee to understand the implications of late reporting and to ensure timely and accurate submission of all required documents to avoid these fees. Franchisees should inquire about the historical frequency and magnitude of these fee adjustments to better anticipate potential cost increases.