Does Carvel specify what happens to the Ad Fund if the franchise agreement is terminated?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We intend for the Ad Fund to be perpetual; however, after all of the Ad Fund contributions have been spent for the purposes described above, we may terminate the Ad Fund.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 59–74)
What This Means (2025 FDD)
According to the 2025 Carvel FDD, the document does not specify what happens to the Ad Fund if the franchise agreement is terminated. The FDD does mention that Carvel intends for the Ad Fund to be perpetual and may terminate the Ad Fund after all contributions have been spent for advertising and promotion.
Item 11 of the FDD discusses the Ad Fund, detailing how Carvel manages and uses the funds collected from franchisees' advertising contributions. Carvel uses these funds for various advertising and promotional activities at their discretion. The FDD specifies that if any monies remain in the Ad Fund at the end of a fiscal year, they will carry over into the next fiscal year.
While the FDD outlines the allocation, management, and potential termination of the Ad Fund, it does not address the specific scenario of what happens to the funds if an individual franchise agreement is terminated. A prospective franchisee should seek clarification from Carvel regarding the disposition of Ad Fund contributions in the event of franchise termination to fully understand their financial obligations and rights.