factual

What is Carvel's obligation if it sells goods directly to franchisees?

Carvel Franchise · 2025 FDD

Answer from 2025 FDD Document

packaging (collectively, the "Proprietary Goods") from us, our affiliates, or our designated Approved Suppliers. For all other Goods, we may require you to purchase such Goods from any Approved Suppliers or from particular Approved Suppliers, or we may permit you to purchase such Goods from any Supplier capable of providing Goods that meet our minimum Standards (to the extent we have specified Standards for such Goods). If we sell Goods directly to you, we will do so at the same price that we charge similarly-situated franchisees. If you are in default under this Agreement, then any obligations we and our Approved Suppliers may have to sell you Goods may be suspended in our sole discretion; and you will not, as a result, have a defense at law or equity based on impossibility of your performance or any claim against us or our Approved Suppliers. If we or our Approved Suppliers are unable to supply you with the quantity and type of Goods you request, we will exert reasonable commercial efforts to allocate, or to cause our Approved Suppliers to allocate, the Goods available on an equitable basis among the Businesses that seek to purchase Goods. You acknowledge that we, our affiliates, and our Approved Suppliers will not be liable if we, our affiliates, or our Approved Suppliers are unable to fulfill your requests.

  • C. Revenue from Purchases. You acknowledge and agree that we and/or our affiliates may derive revenue based on your purchases and leases, including from charging you for Goods we or our affiliates provide to you and from promotional allowances, volume discounts, and other payments made to us by manufacturers, Suppliers, or third parties. If we, our affiliates, or third parties acting under our direction arrange for manufacturers to sell the Goods directly to our Approved Suppliers to then sell them to you, then we or our affiliates will have the right to receive compensation or other consideration from the manufacturers, Approved Suppliers, and/or such third parties for these sales. We and our affiliates may use all amounts received from manufacturers, Suppliers, or third parties, whether or not based on your or other franchisees' actual or prospective dealings with them, without restriction for any purposes we or our affiliates deem appropriate.
  • 7.2 Approved Products. You may offer in the Franchised Business to customers only the Approved Products that we have approved in writing. You must produce and sell all Approved Products we specify, including all menu items and other products and services that we require you to sell, as stated in the Manuals or otherwise, which are all part of the System. We may change these specifications periodically, and we may designate specific Approved Products as optional or mandatory.

Source: Item 23 — Receipts (FDD pages 100–353)

What This Means (2025 FDD)

According to Carvel's 2025 Franchise Disclosure Document, if Carvel or its Approved Suppliers are unable to supply a franchisee with the quantity and type of goods requested, Carvel will make reasonable commercial efforts to allocate the available goods equitably among the businesses seeking to purchase them. However, Carvel, its affiliates, and its Approved Suppliers will not be liable if they cannot fulfill a franchisee's requests.

Carvel and its affiliates may derive revenue from franchisee purchases and leases, including charges for goods provided to the franchisee and from promotional allowances, volume discounts, and other payments from manufacturers, Suppliers, or third parties. If Carvel or third parties arrange for manufacturers to sell goods directly to Approved Suppliers, who then sell to franchisees, Carvel has the right to receive compensation from the manufacturers, Approved Suppliers, and/or such third parties for these sales. Carvel and its affiliates can use these amounts without restriction for any purposes they deem appropriate.

Carvel also disclaims all implied warranties of merchantability and fitness for a particular purpose regarding the goods they offer, sell, or require for the franchised business. The franchisee's exclusive remedy and Carvel's exclusive liability for claims related to these goods are limited to the purchase price of the goods plus shipping costs, or, at Carvel's option, the replacement of the goods. Carvel will not be liable for special, incidental, indirect, consequential, multiplied, exemplary, or punitive damages.

This disclaimer of warranties does not affect any claims the franchisee may have against third-party manufacturers or Suppliers of any sourced products. Franchisees are only allowed to offer Approved Products that Carvel has approved in writing and must sell all Approved Products that Carvel specifies, including menu items and other products and services required by Carvel.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.