Under what circumstances can a Carvel franchisee assign the Service Level Agreement without the Company's prior written consent?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as expressly provided herein, this Agreement may not be assigned by Franchisee without Company's prior written consent including assignment by operation of law and change of control. Any attempted assignment of this Agreement in violation of the preceding sentence will be null and void ab initio. In
the event Franchisee sells or transfers the Franchised Business, this Agreement shall terminate and the transferee shall be required to execute Company's then-current form of Service Level Agreement. In the event of an assignment of the Franchise Agreement which has been approved by Franchisor, this Agreement shall be deemed to be assigned to the assignee of the Franchise Agreement and such assignee shall be deemed to have assumed all rights and obligations of Franchisee under this Agreement. Company may assign this Agreement to any person or entity without Franchisee consent. This Agreement will be binding on and inure to the benefit of the parties and their respective successors and permitted assigns.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee generally needs Carvel's prior written consent to assign the Service Level Agreement. However, there is an exception: if the Franchise Agreement itself is assigned with Carvel's approval, then the Service Level Agreement is automatically deemed to be assigned to the same assignee. In this case, the assignee assumes all the franchisee's rights and obligations under the Service Level Agreement.
This means that if a Carvel franchisee sells their business and the transfer of the Franchise Agreement is approved by Carvel, the new owner automatically takes over the Service Level Agreement. This simplifies the transfer process, as the new franchisee doesn't need to negotiate a new Service Level Agreement, and Carvel LLC doesn't need to provide separate consent for the Service Level Agreement assignment.
It's important to note that any attempted assignment of the Service Level Agreement without Carvel's consent (outside of an approved Franchise Agreement transfer) is considered null and void. This underscores Carvel's control over who provides POS system support to its franchisees. A prospective franchisee should carefully consider these conditions regarding assignment, as failing to comply could result in a breach of the agreement.