What is the timeframe for dismissing a petition for appointment of a receiver for a Carvel franchisee to avoid termination?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
arks, whether on a local, regional, or national scale; (iii) make, or have made, any material misrepresentation to us related to the Franchised Business or this Agreement; or (iv) knowingly maintain false books or records or submit any false reports to us related to the Franchised Business.
- D. You abandon the Franchised Business or otherwise voluntarily suspend operation of the Franchised Business without our prior written consent for five or more consecutive business days on which you were required to operate.
- E. Your interest (or your affiliate's interest) in the lease or sublease for the Accepted Location is terminated or expires or you (or your affiliate) otherwise lose possession of the Accepted Location.
- F. We send you two or more written notices of default under this Agreement for the same or a similar cause or reason in any consecutive 12-month period, whether or not cured.
- G. You: (i) become insolvent by reason of an inability to pay debts as they come due; (ii) are adjudicated bankrupt; (iii) file a petition for bankruptcy protection; (iv) are the debtor in an involuntary bankruptcy petition that is not dismissed within 60 days; (v) are the debtor in an assignment for the benefit of creditors that is not dismissed within 60 days; (vi) are the
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a Carvel franchisee has 60 days to dismiss a petition for the appointment of a receiver to avoid potential termination of their franchise agreement. This condition applies whether the receiver is permanent or temporary.
This clause in the franchise agreement protects Carvel from franchisees who may be facing severe financial distress or mismanagement. The 60-day window provides a limited opportunity for the franchisee to resolve the receivership petition, but if unresolved, Carvel can terminate the agreement. This ensures Carvel can maintain brand standards and protect its reputation by disassociating from failing businesses.
For a prospective Carvel franchisee, this highlights the importance of maintaining sound financial management and addressing any legal or financial challenges promptly. Failing to do so could lead to the loss of the franchise. Franchisees should seek legal and financial advice if they encounter such issues to understand their options and potential consequences under the franchise agreement.