What is the royalty fee for a Carvel franchise, and how often is it payable?

According to the 2025 Carvel Franchise Disclosure Document, the royalty fee is 6% of the Net Sales of the Franchised Business. This fee is payable each week, based on the Net Sales of the Franchised Business for the preceding week. However, the FDD notes that the payment basis could change, stating that the royalty fee could be payable on any other basis stated in the Manuals or in Carvel's written notice to the franchisee.

For a prospective Carvel franchisee, this means that 6% of all revenue generated by the business each week must be remitted to Carvel as a royalty. Net Sales is defined broadly and includes all revenues, whether in cash, credit, or other forms of exchange, from the sale of approved products and services related to the franchise. This includes off-premises services like catering and on-premises services. Franchisees should be aware that Carvel retains the right to modify the payment schedule with written notice or as specified in the manuals.

It is important to note that the royalty fee is a recurring obligation, and failure to pay could result in penalties or termination of the franchise agreement. Franchisees should carefully review the manuals and any written notices from Carvel to stay informed of any changes to the royalty fee payment schedule or calculation. Understanding the definition of Net Sales is also crucial to ensure accurate royalty payments and avoid potential disputes with Carvel.