Under what circumstances would a State Law Addendum be included as Schedule D to the Carvel Franchise Agreement?

According to Carvel's 2025 Franchise Disclosure Document, a State Law Addendum is included as Schedule D to the Carvel Franchise Agreement if required. This addendum modifies the standard franchise agreement to comply with specific state laws and regulations. Several states, such as California, Indiana, Maryland, New York, and North Dakota, require addenda to ensure that the franchise agreement adheres to their franchise laws. These addenda address various aspects, including franchise fees, termination and renewal rights, dispute resolution, and waivers of legal rights.

For example, the California addendum acknowledges the California Franchise Investment Law and the California Franchise Relations Act, amending the franchise agreement for franchises offered and sold in California or to California residents. Similarly, the Indiana addendum addresses the Indiana Deceptive Franchise Practices Law and the Indiana Franchise Disclosure Law, ensuring that the franchise agreement complies with Indiana law. The Maryland addendum addresses the Maryland Franchise Registration and Disclosure Law, modifying provisions related to initial fees, termination, transfer, and dispute resolution.

These state-specific addenda are crucial for protecting the rights of franchisees and ensuring that Carvel operates in compliance with local regulations. Prospective franchisees should carefully review the State Law Addendum applicable to their state to understand how the standard franchise agreement is modified and what specific rights and obligations they have under state law. This ensures that franchisees are fully aware of their legal protections and responsibilities within their specific jurisdiction.

In summary, the inclusion of a State Law Addendum as Schedule D in the Carvel Franchise Agreement is triggered by the legal requirements of the state in which the franchise is offered or sold. These addenda are designed to modify the standard agreement to align with state-specific franchise laws, providing additional protections and clarifying obligations for both the franchisor and the franchisee.