Is Carvel obligated to conduct any advertising in my market?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
right to spend an amount not to exceed 2% (or 1%, as applicable) of the Net Sales of your Shoppe on local advertising for you, and you will reimburse us for these expenses upon your receipt of our invoice. Amounts you contribute to an Advertising Cooperative will be credited toward the Local Marketing Obligation. Your Local Marketing Obligation is in addition to your Grand Opening Obligation and your required Advertising Contribution.
We have the right upon written notice to you to require you to pay all or a portion of the Local Marketing Obligation to us for us to, in our sole discretion, (a) contribute to the Ad Fund, (b) spend on national, regional, or local advertising campaigns, (c) contribute to your Advertising Cooperative, or (d) spend on local advertising in your market. If we exercise our right to collect your entire Local Marketing Obligation (and not just a portion of it), you will not be required to (x) spend a minimum amount on local advertising (other than your Grand Opening Obligation), (y) provide a local marketing plan, or (z) participate in, or contribute to, your Advertising Cooperative. We are not obligated to ensure that the Local Marketing Obligation monies that we spend are proportionate or equivalent to your contributions or that your Shoppe will benefit directly or pro rata or in any amount from the placement of advertising.
From time to time, we or your Advertising Cooperative (if any) may establish temporary or permanent promotional campaigns (e.g., limited time offers, gift cards, coupons, loyalty programs,
customer relationship management, and other supplemental marketing programs) applicable to the System as a whole or to specific advertising market areas. These promotional campaigns may also promote, or involve the participation of, restaurants or businesses other than Shoppes, such as restaurants or businesses operated under different brands that are operated or licensed by our affiliates. You are required to participate in these promotional programs at your own cost, including the costs to purchase, lease and install all materials necessary to the promotional campaigns, including counter cards, posters, banners, signs, photographs, give-away items, and gift cards.
Digital Marketing.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 59–74)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel is not obligated to ensure that advertising impacts or penetrates your specific market. However, franchisees are required to participate in local market advertising. Each calendar quarter, franchisees must spend at least 2% of their Net Sales on local market advertising (or 1% of Net Sales for Ice Cream Trucks or Co-Branded Shoppes). Carvel may change this Local Marketing Obligation, but they must provide at least 60 days' written notice.
The franchisee determines the amount of funds spent on individual local market advertising, but it must comply with Carvel's requirements to count toward the Local Marketing Obligation. If a franchisee fails to meet this obligation, Carvel has the right to spend up to 2% (or 1%, if applicable) of the Shoppe's Net Sales on local advertising and require reimbursement from the franchisee. Contributions to an Advertising Cooperative will be credited toward the Local Marketing Obligation. This local marketing is in addition to the Grand Opening Obligation and the required Advertising Contribution.
Carvel has the right to require franchisees to pay all or a portion of the Local Marketing Obligation to them. Carvel, in its sole discretion, can then (a) contribute to the Ad Fund, (b) spend on national, regional, or local advertising campaigns, (c) contribute to the franchisee's Advertising Cooperative, or (d) spend on local advertising in the franchisee's market. If Carvel collects the entire Local Marketing Obligation, the franchisee will not be required to spend a minimum amount on local advertising (other than the Grand Opening Obligation), provide a local marketing plan, or participate in an Advertising Cooperative.
Franchisees are required to participate in any local, regional, or national cooperative advertising group consisting of other Shoppes (an "Advertising Cooperative") that Carvel specifies, when and if any of these groups are created. Carvel currently has Advertising Cooperatives operating in Long Island, Ft. Lauderdale, West Palm Beach, Miami and South Jersey. If Carvel collects your entire Local Marketing Obligation, they will not require you to participate in an Advertising Cooperative.