Can Carvel require franchisees to purchase specific supplies (including chemicals)?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
se 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.
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 specific supplies, including chemicals, from approved sources. Carvel can stipulate that these supplies meet their established specifications, be of a particular brand, kind, or model, and be purchased exclusively from designated or approved suppliers. These suppliers may include Carvel, its affiliates, or a buying cooperative organized by them. Carvel also reserves the right to modify or add approved suppliers at any time.
Carvel franchisees are obligated to acquire all proprietary ingredients, products, uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging from Carvel, its affiliates, or designated approved suppliers. This includes printed paper, paper products, and plastic products bearing Carvel's trademarks, such as dishes, containers, cartons, bags, napkins, and packaging supplies. Carvel may also require franchisees to purchase trademarked product lines like t-shirts, apparel, mugs, and other merchandise from approved sources. Additionally, franchisees may be required to purchase test products from designated suppliers if Carvel conducts test marketing for new food or non-food items.
Currently, Carvel estimates that purchases from approved suppliers and under their standards will constitute approximately 85% of the total purchases and leases needed to establish a Shoppe and about 90% of the total purchases and leases needed to operate a Shoppe. Franchisees must purchase at least 98% of their food-related products from approved suppliers, with the option to purchase up to 2% of food-related items like milk, minor ingredients, and fruit from other suppliers. Carvel retains the discretion to deem any supplier ineligible and to designate approved suppliers for any goods with written notice to franchisees.
If a franchisee wishes to use products or purchase from suppliers not already approved, they must submit a written request for approval. Carvel has the right to inspect the supplier's facilities and test product samples, with the franchisee bearing the costs of inspection and testing, regardless of whether approval is granted. Carvel's decision to approve or deny a supplier is based solely on their judgment, and they will notify the franchisee in writing. Approval may be contingent upon the supplier demonstrating the ability to meet Carvel's standards, signing confidentiality agreements, and proving good standing in the business community.