Can Carvel require franchisees to purchase other products?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
isees for any of these items. The availability and terms of financing will depend on factors like the availability of financing generally, your credit worthiness, collateral you pledge, policies of your lending institution, and economic conditions in your area.
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Required Purchases. We have the right to require that Approved Products, other products, Proprietary Ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services (collectively, "Goods") that you purchase for resale or purchase or lease for use in your Shoppe: (i) meet specifications that we establish from time to time; (ii) be a specific brand, kind, or model; (iii) be purchased or leased only from Approved Suppliers; (iv) be purchased or leased only from a single source that we designate (which may include us or our affiliates or a buying cooperative organized by us or our affiliates); and/or (v) be purchased as part of a purchasing program, arrangement, or contract that we negotiate or specify. We may add or change Approved Suppliers at any time.
You must purchase all of your requirements of Proprietary Ingredients, Proprietary Products, and proprietary uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging (collectively, the "Proprietary Goods") from us, our affiliates, or our designated Approved Suppliers. The Proprietary Goods include printed paper, paper products, and plastic products bearing our Proprietary Marks (including, for example, dishes, containers, cartons, bags, napkins, and packaging supplies). We may require you to purchase certain trademarked product lines consisting of t-shirts, apparel, mugs and other merchandise and products bearing the Proprietary Marks ("Trademarked Product Lines") from us, our affiliates, or our designated Approved Suppliers. In addition, if we conduct test marketing to determine consumer trends and the salability of new food or non-food products and services, you may be required to purchase a reasonable quantity of test products we specify from designated Approved Suppliers.
For any proposed site, we may require you to obtain a site selection analysis from an Approved Supplier, which may include an analysis of such factors as traffic patterns, demographics and competitors within the market. As you design and construct your Shoppe, you must hire an architect that we accept in writing to prepare your plans and make any necessary changes to our standard layout and specifications. In addition, you must hire a licensed and insured general contractor that we accept to complete the build-out of your Shoppe. Our acceptance of your architect or general contractor will not in any way be our endorsement of your architect or general contractor or render us liable for your architect's or general contractor's performance. When you refresh or remodel your Shoppe, we may require you to obtain, at your expense, a site survey and design solution from us, our affiliates, or a designated vendor.
You must purchase and install, at your expense, all fixtures, furnishings, equipment (including a Computer System), décor and signs, as we direct. If we modify our menu, we may require you to purchase additional equipment to prepare and store new menu items. You may not install on or about your Shoppe any merchandise, furnishings, interior or exterior décor items, supplies, fixtures, equipment or utensils unless they have been approved by us in writing. You must purchase these items only from an Approved Supplier unless we specify otherwise.
You are required to purchase most of the components of the Computer System that we specify from Approved Suppliers.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 52–56)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel has the right to mandate that franchisees purchase or lease specific goods for resale or use in their shops. These goods include Approved Products, other products, Proprietary Ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services. Carvel can stipulate that these items meet certain specifications, be a specific brand, kind, or model, and be purchased or leased only from Approved Suppliers or a single designated source, which may include Carvel or its affiliates. These purchases may also be required as part of a purchasing program or contract negotiated or specified by Carvel.
Carvel franchisees are obligated to purchase all their requirements of Proprietary Ingredients, Proprietary Products, and proprietary uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging from Carvel, its affiliates, or designated Approved Suppliers. These Proprietary Goods include printed paper, paper products, and plastic products bearing Carvel's Proprietary Marks. Carvel may also require franchisees to purchase certain trademarked product lines, such as t-shirts, apparel, mugs, and other merchandise bearing the Proprietary Marks, from designated sources. Additionally, franchisees may be required to purchase reasonable quantities of test products from designated Approved Suppliers if Carvel conducts test marketing for new food or non-food products and services.
Carvel also requires franchisees to participate in the Gift Card and Loyalty Programs, as well as the in-shop mobile and online ordering program. Participation in these programs may necessitate investments in additional equipment and the payment of fees to credit card processing vendors, gift card processing vendors, and other hardware and software vendors designated by Carvel. Franchisees are also obligated to purchase and maintain specific types of insurance coverage from insurance companies that meet Carvel's minimum standards, with Carvel and other designated parties named as additional insureds. Carvel reserves the right to implement a master insurance policy for the system and require franchisees to pay their proportionate share of the coverage.
Currently, franchisees can purchase the remaining goods used in their shops from any source, provided that the supplier and the goods meet Carvel's minimum standards. However, Carvel retains the right to designate any supplier as ineligible or to designate one or more Approved Suppliers for any goods upon written notice. While neither Carvel nor its affiliates are currently Approved Suppliers for all goods, they reserve the right to become the exclusive Approved Supplier for any goods in the future. GoTo Supply provides supply chain, quality assurance, distribution, and logistics services, and GoTo Rewards administers the gift card program, though neither are Approved Suppliers for any goods currently.