Does Carvel have sole discretion over advertising and promotional programs?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We or an affiliate will administer the Ad Fund. We have sole authority to direct all advertising programs and promotions and uses of the Ad Fund, with sole control over the creative concepts, materials, and media used in the programs, and the placement and allocation of advertising. We reserve the right to use any media, create any programs, and allocate advertising and promotional expenditures to any regions or locales we deem appropriate.
Digital Marketing. We or our affiliates, in our sole discretion, may establish and operate websites, social media accounts (such as Facebook, X, Instagram, Pinterest, Snapchat, YouTube, TikTok, etc.), applications, keyword or adword purchasing programs, accounts with websites featuring gift certificates or discounted coupons (such as Groupon, Living Social, etc.), mobile applications, online videos, display banner campaigns, e-mail marketing campaigns, or other means of digital advertising on the Internet or any other means of digital or electronic communications (collectively, "Digital Marketing") that are intended to promote the Proprietary Marks, your Shoppe, and the entire network of Shoppes. We will have the sole right to control all aspects of any Digital Marketing, including those related to your Shoppe.
Currently, except for Advertising and Promotional Content we furnish to you and certain branded content social media postings, you must submit to us for our written approval, before use, copies of all proposed Advertising and Promotional Content that you intend to use or implement. We have the right to approve or disapprove (or to require you to discontinue using) any Advertising and Promotional Content, as well as the media in which intend to use them, in our sole discretion.
We have the right upon written notice to you to require you to pay all or a portion of the Local Marketing Obligation to us for us to, in our sole discretion, (a) contribute to the Ad Fund, (b) spend on national, regional, or local advertising campaigns, (c) contribute to your Advertising Cooperative, or (d) spend on local advertising in your market.
We do not have an advertising council composed of franchisees that is involved in decision-making on advertising issues, but the Carvel Franchise Advisory Council ("FAC") provides us suggestions on advertising issues. The FAC is advisory only and does not have decision-making authority. At a minimum, a majority of the members of the FAC are franchisees in good standing who are nominated and elected by other franchisees, and the remainder of the members are franchisees or other representatives who may be appointed by us. We have the power to form, change, or dissolve the FAC or any other advertising or advisory council at any time.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 59–74)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel maintains significant control over advertising and promotional programs, but franchisees also have some responsibilities and opportunities for local marketing. Carvel has sole authority to direct all advertising programs and promotions and uses of the Ad Fund, with sole control over the creative concepts, materials, and media used in the programs, and the placement and allocation of advertising. Carvel also has the sole right to control all aspects of any Digital Marketing, including those related to a franchisee's Shoppe. This includes establishing and operating websites, social media accounts, and other means of digital advertising.
Franchisees are required to participate in promotional campaigns established by Carvel or their Advertising Cooperative, bearing the costs to purchase or lease necessary materials. Franchisees are also responsible for a Local Marketing Obligation, which requires them to spend a percentage of their Net Sales on local market advertising. Currently, this obligation is at least 2% of Net Sales (1% for Ice Cream Trucks or Co-Branded Shoppes). However, Carvel has the right to mandate that franchisees pay their Local Marketing Obligation to Carvel, which Carvel may then use for various advertising purposes.
While franchisees determine how to spend their local marketing funds, Carvel retains the right to approve or disapprove any Advertising and Promotional Content that franchisees intend to use. Carvel also manages the Ad Fund, using it for national, local, or regional advertising, promotional, or brand-building programs. The advertising and promotions that Carvel conducts are intended to maximize general public recognition and patronage of the System generally in the manner that Carvel determines to be most effective. Carvel is not obligated to ensure that advertising expenditures are proportionate to franchisee contributions or that franchisees benefit directly from advertising placements.
Carvel does not have an advertising council composed of franchisees that is involved in decision-making on advertising issues, but the Carvel Franchise Advisory Council provides suggestions on advertising issues. The FAC is advisory only and does not have decision-making authority. Carvel has the power to form, change, or dissolve the FAC or any other advertising or advisory council at any time.