What rights are protected within the Area of Protection for a Carvel Streetside Location?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
mine, in our sole discretion, which when combined with the Local Marketing Obligation (as specified in Section 10.1.E. (Local Marketing Obligation)) shall
not exceed 5% of the Net Sales of the Franchised Business, payable each week on the Net Sales of the Franchised Business for the preceding week (or on any other basis stated in the Manuals or in our written notice to you). We and the Co-Branded Franchisor will jointly collect the Advertising Contribution from you based on the Net Sales of the entire Co-Branded Franchise.
11. Section 4.1 (Reserved Rights): The following provisions are added to Section 4.1 of the Agreement.
[For Streetside Locations:]
- A. Area of Protection. We grant you a protected territory in which you have certain limited exclusive rights (an "Area of Protection"). [Your Area of Protection is: a _.__ mile [OR block] radius from the Accepted Location with the Accepted Location as the center point.] [OR] [We will designate, in our sole discretion, your Area of Protection after we accept the Proposed Location as the Accepted Location. When we designate the Area of Protection for the Franchised Business, you must sign standard documentation we prepare, which includes a general release, to document the Area of Protection.] If you relocate the Franchised Business pursuant to Section 5.5 (Relocation of the Franchised Business), we will specify an Area of Protection for the new location.
- B. Protected Rights. During the Term, we will not establish or operate, nor license any other person to establish or operate, a Swirl Business at a Streetside Location within the Area of Protection. "Streetside Locations" include freestanding, inline, and endcap locations on city streets or in shopping centers (including power centers, lifestyle centers, and strip centers, but excluding malls (enclosed and open air) and outlet malls and centers).
- C. Other Locations. "Other Locations" include all locations other than Streetside Locations, including airports, amusement parks, big box stores, casinos, colleges, convenience stores, farmer's markets, military bases, malls (enclosed and open air), outlet malls and centers, sports and entertainment venues, train stations, transportation centers, travel plazas, truck stops, universities, zoos, and Delivery Kitchens. "Delivery Kitchens" include kitchens devoted to the preparation of products or Approved Products (often referred to as ghost, dark, or cloud kitchens), which may use the Marks and may deliver to customers located anywhere.
- D. Our Reserved Rights. We and our affiliates reserve all rights that we do not expressly grant you in this Agreement.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee with a Streetside Location is granted certain protected rights within their Area of Protection. During the term of the agreement, Carvel will not establish or operate, nor license any other person to establish or operate, a Swirl Business at a Streetside Location within the franchisee's Area of Protection. Streetside Locations include freestanding, inline, and endcap locations on city streets or in shopping centers, including power centers, lifestyle centers, and strip centers, but exclude malls (enclosed and open air) and outlet malls and centers.
However, this protection does not extend to Other Locations, which include locations other than Streetside Locations such as airports, amusement parks, big box stores, casinos, colleges, convenience stores, farmer's markets, military bases, malls (enclosed and open air), outlet malls and centers, sports and entertainment venues, train stations, transportation centers, travel plazas, truck stops, universities, zoos, and Delivery Kitchens. Carvel retains the right to establish or license franchises and/or company-owned businesses offering similar products or services in these Other Locations, even within the Area of Protection granted to the franchisee. Carvel also retains the right to conduct business through alternative channels of distribution, such as supermarkets, convenience stores, e-commerce, and Delivery Kitchens, without providing any compensation to the franchisee.
Additionally, Carvel will not establish or operate, nor license any other person to establish or operate, a Business operating under the Marks and the System that is co-branded and co-located with a Cinnabon® business that is operated under the Cinnabon® marks and system (a “Co-Branded Business”) at a Streetside Location within the Area of Protection. Co-Branded Businesses do not include single-branded Businesses, businesses that operate under the Cinnabon Swirl™ mark, and businesses that do not include the exact combination of multiple brands as the Co-Branded Business (such as a Business that is co-branded with a brand other than the Cinnabon® brand or that is multi-branded with the Cinnabon® brand and one or more other brands).
It is important to note that Carvel, its affiliates, and other franchisees may still solicit and service customers from any geographic location, including those within the franchisee's Area of Protection. They may also provide Catering Services and Delivery Services within the Area of Protection. Furthermore, Carvel reserves the right to modify or eliminate the Area of Protection if the franchisee defaults on the agreement and Carvel chooses not to terminate the agreement. This means that while a franchisee has some protection against direct competition from other Carvel Streetside Locations and Co-Branded Businesses within their designated area, Carvel retains significant rights to operate and license other businesses and channels of distribution, even within that same area.