What is the scope of Carvel's review of a lease renewal or extension?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1, 4 | Amount | Date Due | Remarks |
|---|---|---|---|
| We may require you to pay the training fee again for the rescheduled training. | |||
| Learning Management System License Fee | The then-current fee. Currently, $170 per year. | As incurred | We may require you to license an electronic learning management system (the “Learning Management System”) to participate in certain required training programs and access the Manuals. We may require you to pay this fee to us, an affiliate, or a third-party vendor. We may change this fee in any year by no more than the Allowed Adjustment. |
| Sublease Administration Fee | Our then-current fee. Currently, $200 per month. | As incurred | If you sublease a Shoppe from us, you must pay us this fee to compensate us for our administrative expenses. The fee is in addition to any fees under the sublease such as rent, insurance, public utility charges, late fees, alterations and improvements. We may change this fee in any year by no more than the Allowed Adjustment. |
| Lease Renewal/ Extension Review Fee | Our then-current fee. Currently, ranges from $500 for a lease term of two years or less to $2,000 for a term of five years or more. | As incurred | If you renew a lease or a lease is extended by the landlord for a period of 12 months or more, you must obtain our approval of the lease and, in our sole discretion, pay this fee, which we may change in any year by no more than the Allowed Adjustment. Our review of the lease will be limited to determining whether it complies with the Franchise Agreement. We may change this fee in any year by no more than the Allowed Adjustment. |
Source: Item 6 — OTHER FEES (FDD pages 31–42)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, if a franchisee renews their lease or the lease is extended by the landlord for 12 months or more, the franchisee must obtain Carvel's approval of the lease. Carvel may also require the franchisee to pay a Lease Renewal/Extension Review Fee. This fee currently ranges from $500 for a lease term of two years or less to $2,000 for a term of five years or more. Carvel may change this fee in any year by no more than the Allowed Adjustment.
Carvel's review of the lease will be limited to determining whether it complies with the Franchise Agreement. This means Carvel is primarily concerned with ensuring the lease terms do not conflict with the franchisee's obligations under the Franchise Agreement.
For a prospective Carvel franchisee, this implies that lease renewals or extensions are not automatically approved. Carvel retains the right to review and potentially reject a lease if it doesn't align with the Franchise Agreement. The franchisee will also need to budget for the Lease Renewal/Extension Review Fee, which can vary depending on the lease term. Franchisees should factor in the potential for this fee to increase annually, although any increase is capped by the Allowed Adjustment.