What are the restrictions on a Carvel franchisee's involvement in competitive businesses during the term of the franchise agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Agreement | Summary |
|---|---|---|
| q. Non-competition | FA: 15.4 | Subject to state law, no involvement in a competitive |
| covenants during the | business (generally, similar types of businesses that | |
| term of the franchise | offer products the same or similar to the Approved Products) anywhere. You may not divert or attempt to divert any business or potential business, misuse vendor relationships, or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 84–91)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, franchisees are restricted from involvement in competitive businesses during the franchise term. Specifically, subject to state law, a Carvel franchisee cannot be involved in a business that offers products similar to Carvel's Approved Products anywhere. This restriction applies to the franchisee, their guarantors, and owners.
Beyond simply owning or operating a competing business, Carvel franchisees are prohibited from diverting or attempting to divert any business or potential business away from Carvel. They also cannot misuse vendor relationships or perform any action that could harm the goodwill associated with Carvel's Proprietary Marks and the System.
These non-compete terms are typical in franchising to protect the brand and prevent franchisees from using Carvel's confidential information and systems to benefit a competing business. The restrictions are in place to ensure that franchisees remain fully committed to the success of their Carvel franchise and do not engage in activities that could undermine the brand's market position.