Who owns the goodwill associated with the Proprietary Marks licensed by Carvel?

According to Carvel's 2025 Franchise Disclosure Document, Carvel owns all rights, titles, and interests in the Proprietary Marks, including the goodwill associated with them. This means that Carvel retains exclusive ownership of the brand's reputation and image. Any goodwill that a franchisee generates through the use of Carvel's trademarks benefits Carvel exclusively.

This has significant implications for prospective franchisees. While franchisees are granted the right to use Carvel's trademarks to operate their businesses, they do not gain any ownership in the brand equity they help create. This is a standard practice in franchising, where the franchisor maintains control over the brand's identity and reputation. Upon expiration or termination of the Franchise Agreement, all rights to use the Proprietary Marks revert back to Carvel without any compensation to the franchisee.

Furthermore, franchisees are prohibited from taking any actions that could challenge Carvel's ownership or interest in the Proprietary Marks and the associated goodwill. This underscores the franchisor's commitment to protecting its brand and ensuring consistent brand representation across all franchise locations. Franchisees must strictly adhere to Carvel's standards, specifications, requirements, and instructions when using the Proprietary Marks.

In summary, while franchisees contribute to building Carvel's brand recognition and goodwill through their daily operations, the ultimate benefit accrues to Carvel. This arrangement is typical in franchise systems, where the franchisor invests in developing and maintaining the brand, and franchisees leverage the brand's established reputation to operate their businesses.