Is the Carvel Royalty Fee refundable?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
3.2 Ongoing Fees.
- A. Royalty Fee. You must pay to us a recurring, non-refundable royalty fee in the amount and at the times specified in Schedule A (the "Royalty Fee"). Concurrent with these payments, you must submit to us any reports or statements required under Section 14.3 (Systems and Reports).
- B. Advertising Contribution. You must pay to us a recurring, non-refundable advertising contribution in the amount and at the times specified in Schedule A (the "Advertising Contribution"). The Advertising Contribution will be in addition to, and exclusive of, your Grand Opening Obligation as specified in Section 10.1.C. (Grand Opening Advertising) and your Local Marketing Obligation as specified in Section 10.1.E. (Local Marketing Obligation), if any.
- C. Net Sales. "Net Sales" means all revenues generated by your Franchised Business or conducted from or with respect to the Franchised Business, whether the sales are evidenced by cash, check, credit, charge, account, barter or exchange. Net Sales includes monies, gift card redemptions, or credit generated by or received from (i) the sale of Approved Products or tangible property of every kind and nature, promotional or otherwise, anywhere and (ii) services performed from, at, or in connection with the Franchised Business, including (x) offpremises services (such as catering and delivery), (y) on-premises services (such as games, gambling machines, or third-party advertising within the Franchised Business), or (z) any other services or activities that use either the System, the Marks, or products that are the same as or similar to the Approved Products. The foregoing list is not intended to provide approval for such activities, which may be conducted only if approved. Unless we specify otherwise in writing, Net Sales shall include all ancillary charges or fees, including delivery fees and other service charges,
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the royalty fee is non-refundable. Franchisees must pay a recurring royalty fee, the amount and timing of which are specified in Schedule A. This fee is a percentage of the Net Sales of the franchised business. Concurrent with these payments, franchisees must submit any required reports or statements.
In addition to the royalty fee, Carvel franchisees must also pay a recurring advertising contribution, which is also non-refundable. The amount and timing of this contribution are also specified in Schedule A. This advertising contribution is separate from any Grand Opening Obligation and Local Marketing Obligation.
Net Sales are defined as all revenues generated by the franchised business, whether evidenced by cash, check, credit, charge, account, barter, or exchange. This includes monies, gift card redemptions, or credit from the sale of approved products or tangible property, and services performed in connection with the franchised business, including off-premises services like catering and delivery, and on-premises services. Unless otherwise specified in writing, Net Sales include all ancillary charges or fees, including delivery fees and other service charges.