Does Carvel specify if the Ad Fund can be used for limited-time menu offerings?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the Ad Fund to meet the costs of administering, preparing, and conducting national, local, or regional advertising, promotional, or brand building programs of any kind, including the cost of (i) preparing and conducting television, radio, magazine, newspaper, and digital advertising campaigns and other public relations activities (including, but not limited to, for purposes of brand reputation management), (ii) employing public relations firms and advertising agencies to assist in these activities, and (iii) conducting other activities that are directly or indirectly designed to promote the System, its franchisees, and/or increase System sales, such as limited-time menu offerings, crew incentives, franchisee incentive and/or promotional programs, customized materials (e.g., cups), up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, mystery shop and shopper programs, brand websites and ordering platforms, brand applications, social media account administration and promotion, and in-shoppe equipment and technologies related to such marketing programs. We may use the Ad Fund to compensate us for the reasonable administrative costs and overhead we incur in activities related to advertising and promotional programs, including new product development; market research; preparing advertising and promotional materials; Digital Marketing (as defined below); working with public relations firms, advertising agencies, advertising placement services, and creative talent; reimbursing franchisee advisory council meeting expenses; developing and maintaining, and paying third parties for the development and maintenance of, internet sites, applications, and other equipment and technologies related to marketing programs.
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, the Ad Fund can be used for limited-time menu offerings. Specifically, the FDD states that the Ad Fund can cover the costs of administering, preparing, and conducting advertising, promotional, or brand-building programs, including activities designed to promote the System and increase sales, such as limited-time menu offerings. This indicates that Carvel franchisees could benefit from the Ad Fund's resources when introducing new, temporary menu items.
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 reserves the right to use any media, create any programs, and allocate advertising and promotional expenditures to any regions or locales they deem appropriate. This means that while the Ad Fund can support limited-time menu offerings, Carvel ultimately decides how the funds are spent and which promotions to prioritize.
In 2024, Carvel allocated the Ad Fund towards various marketing expenses, including media placement, production and agency fees, guest response programs, menu innovation projects, and brand and category marketing expenses. Sixteen percent of the Ad Fund was spent on media placement, 35% was spent on production and agency fees, 10% was spent on guest response programs and menu innovation projects, 36% was spent on brand and category marketing expenses, and 3% was spent on administrative expenses. This breakdown gives prospective franchisees an idea of how Carvel has allocated the Ad Fund in the past, though future allocations may vary.
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. This means that franchisees have a limited ability to influence how the Ad Fund is used, including for limited-time menu offerings. Prospective franchisees should consider this when evaluating the level of control they will have over marketing decisions.