When transferring a Carvel franchise, what must the franchisee, their guarantors, and owners sign, and what obligations do they remain liable for?

According to Carvel's 2025 Franchise Disclosure Document, when transferring a franchise, the franchisee, their guarantors, and owners must sign a general release. Additionally, the franchisee and their owners remain liable for pre-transfer obligations.

This means that even after the franchise is transferred to a new owner, the original franchisee and their associated parties are still responsible for any debts, liabilities, or other obligations that were incurred before the transfer took place. This is a common practice in franchising to protect the franchisor from any potential losses or liabilities that may arise from the previous franchisee's operation of the business.

Prospective Carvel franchisees should carefully consider this aspect of franchise transfer, as it means they could still be held responsible for issues that occurred under their ownership even after they have sold the business. It is important to ensure that all obligations are met and the business is in good standing before initiating a transfer to minimize potential future liabilities.