What reports or statements must a Carvel franchisee submit when paying the Royalty Fee?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Royalty Fee. You must pay to us a recurring, non-refundable royalty fee in the amount and at the times specified in Schedule A (the "Royalty Fee"). Concurrent with these payments, you must submit to us any reports or statements required under Section 14.3 (Systems and Reports).
- 14.3 Systems and Reports.
You must: (i) comply with all our Standards on accounting systems, procedures, and formats, if any; (ii) timely submit to us complete and accurate financial, operational, and other reports we require (including weekly reports detailing the Gross Sales and Net Sales during the preceding week and monthly profit and loss statements for the prior month's operations); and (iii) use all forms we specify.
You must submit any report by mail, telephone, electronic means, or any other means we may designate.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, when a franchisee makes Royalty Fee payments, they must also submit any reports or statements required under Section 14.3, which pertains to Systems and Reports. This implies that the submission of these reports is a mandatory part of the royalty payment process.
Section 14.3 specifies that franchisees must comply with Carvel's standards on accounting systems, procedures, and formats. They are also required to submit complete and accurate financial, operational, and other reports as required by Carvel. These reports include weekly reports detailing Gross Sales and Net Sales from the preceding week, as well as monthly profit and loss statements for the prior month's operations. Furthermore, franchisees must use all forms specified by Carvel for these submissions.
The reports can be submitted via mail, telephone, electronic means, or any other method designated by Carvel. This gives Carvel flexibility in how they collect data from franchisees and allows them to adapt their reporting methods as needed. It is crucial for prospective franchisees to understand these reporting requirements and ensure they can accurately and promptly provide the necessary information to Carvel, as failure to do so could result in penalties or other consequences as outlined in the Franchise Agreement.