What obligations are Carvel franchisees prohibited from creating on behalf of the franchisor in the Site Agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
A. No Right to Bind. You will not use the Marks in signing any contract, instrument, application for any license or permit, or legal obligation, or in a manner that may result in liability
to us for your obligations, except as this Agreement expressly authorizes. Except as this Agreement expressly authorizes, neither of us will make any express or implied agreements, warranties, guarantees, or representations, or incur any debt, in the name of or on behalf of the other or represent that the relationship between you and us is other than that of franchisor and franchisee.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, franchisees are restricted from creating certain obligations on behalf of Carvel. Specifically, franchisees cannot use Carvel's trademarks in signing any contract, instrument, application for any license or permit, or legal obligation in a way that could make Carvel liable for the franchisee's obligations.
This restriction is in place to ensure that Carvel is not held responsible for the debts or actions of its franchisees. It reinforces the independent contractor relationship between Carvel and its franchisees, clarifying that neither party can incur debts or make agreements on behalf of the other, unless expressly authorized in the Franchise Agreement. This protects Carvel from potential liabilities arising from the franchisee's business operations.
Furthermore, franchisees are prohibited from representing their relationship with Carvel as anything other than that of a franchisor and franchisee. This means a franchisee cannot imply or state that they are a partner, agent, or employee of Carvel. This provision aims to maintain a clear distinction between the franchisor's and franchisee's roles and responsibilities, preventing any confusion among customers, suppliers, or other parties about the nature of their affiliation.
In practical terms, a prospective Carvel franchisee needs to be aware that they must conduct their business and sign agreements in their own name as an independent entity. They cannot create any obligations that would bind Carvel financially or legally, except where explicitly permitted by the Franchise Agreement. This ensures that the franchisee is responsible for their own business dealings and that Carvel's assets and reputation are protected from any liabilities incurred by the franchisee.