Under the Carvel agreement, are there limitations on who can be held liable?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
- n.
Limited Recourse.
The parties agree that any remedy or recourse available under or related to this Agreement is strictly limited to the parties to this Agreement.
No past, present or future director, officer, employee, incorporator, member, partner, stockholder, subsidiary, affiliate, controlling party, entity under common control, ownership or management, vendor, service provider, agent or attorney of either party shall have any liability under this Agreement of or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and thereby.
The foregoing is not intended to discharge either party from its liability for any breach of this Agreement by its directors, officers, employees, consultants and agents.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to the 2025 Carvel Franchise Disclosure Document, the franchise agreement includes a clause that limits recourse to the parties directly involved in the agreement. This means that any remedies or legal actions related to the agreement are restricted to Carvel and the franchisee.
Specifically, the agreement states that no past, present, or future director, officer, employee, incorporator, member, partner, stockholder, subsidiary, affiliate, controlling party, entity under common control, ownership or management, vendor, service provider, agent, or attorney of either party can be held liable under the agreement. This provision shields these individuals and entities from claims arising from the franchise relationship. However, this limitation is not intended to protect either party from liability for breaches of the agreement caused by their directors, officers, employees, consultants, and agents.
This "limited recourse" clause is designed to protect individuals and affiliated entities associated with Carvel and the franchisee from being held personally liable for obligations or disputes arising under the franchise agreement. It clarifies that liability is primarily confined to the contracting parties themselves, which is a fairly common practice in franchising to provide some level of protection to those indirectly involved in the business. A prospective franchisee should understand this limitation and how it might affect their legal options in case of a dispute.