Does Carvel specify if the Approved Suppliers for Proprietary Goods can be affiliates?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
v) be purchased or leased only from a single source that we designate (which may include us or our affiliates or a buying cooperative organized by us or our affiliates); and/or (v) be purchased as part of a purchasing program, arrangement, or contract that we negotiate or specify. We may add or change Approved Suppliers at any time.
You must purchase all of your requirements of Proprietary Ingredients, Proprietary Products, and proprietary uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging (collectively, the "Proprietary Goods") from us, our affiliates, or our designated Approved Suppliers. The Proprietary Goods include printed paper, paper products, and plastic products bearing our Proprietary Marks (including, for example, dishes, containers, cartons, bags, napkins, and packaging supplies). We may require you to purchase certain trademarked product lines consisting of t-shirts, apparel, mugs and other merchandise and products bearing the Proprietary Marks ("Trademarked Product Lines") from us, our affiliates, or our designated Approved Suppliers. In addition, if we conduct test marketing to determine consumer trends and the salability of new food or non-food products and services, you may be required to purchase a reasonable quantity of test products we specify from designated Approved Suppliers.
For any proposed site, we may require you to obtain a site selection analysis from an Approved Supplier, which may include an analysis of such factors as traffic patterns, demographics and competitors within the market. As you design and construct your Shoppe, you must hire an architect that we accept in writing to prepare your plans and make any necessary changes to our standard layout and specifications. In addition, you must hire a licensed and insured general contractor that we accept to complete the build-out of your Shoppe. Our acceptance of your architect or general contractor will not in any way be our endorsement of your architect or general contractor or render us liable for your architect's or general contractor's performance.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 52–56)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel does specify that approved suppliers for proprietary goods can be affiliates. Carvel franchisees must purchase all requirements of Proprietary Ingredients, Proprietary Products, and proprietary uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging (collectively, the "Proprietary Goods") from Carvel, its affiliates, or its designated Approved Suppliers. Carvel also states that they and their affiliates reserve the right to become an Approved Supplier or the only Approved Supplier for any Goods in the future.
This means that Carvel has the right to require franchisees to purchase specific items from themselves or their affiliated companies. This is a fairly common practice in franchising, as it allows the franchisor to maintain quality control and consistency across all locations. However, it also means that franchisees may not be able to shop around for the best prices on these items.
Carvel also discloses that during the fiscal year 2024, they received payments totaling $9,457,522 from Approved Suppliers. Additionally, their affiliate, CL, received $193,502 in payments from Approved Suppliers, all of which were deposited into the Ad Fund, and $85,890 from franchisees for support fees associated with the POS System. This demonstrates the potential financial benefits that Carvel and its affiliates can receive from these supplier relationships. Franchisees should consider these potential costs and benefits when evaluating the Carvel franchise opportunity.