Under what condition is a Carvel franchisee not required to participate in an Advertising Cooperative?

According to Carvel's 2025 Franchise Disclosure Document, a franchisee is not required to participate in an Advertising Cooperative if Carvel collects the entire Local Marketing Obligation. Carvel has the right to collect all or a portion of the Local Marketing Obligation from the franchisee. If Carvel exercises this right and collects the entire Local Marketing Obligation, the franchisee will not be required to participate in, or contribute to, the Advertising Cooperative.

Carvel may use the Local Marketing Obligation funds collected to contribute to the Ad Fund, spend on national, regional, or local advertising campaigns, contribute to the Advertising Cooperative in the franchisee's market, or spend on local advertising in the franchisee's market. Carvel is not obligated to ensure that the Local Marketing Obligation monies spent are proportionate or equivalent to the franchisee's contributions or that the franchised business will benefit directly or pro rata or in any amount from the placement of advertising.

This means that while a Carvel franchisee might typically be expected to join and contribute to a local advertising cooperative, Carvel retains the option to manage all local marketing funds directly. If Carvel chooses this route, the franchisee is then relieved of the responsibility to participate in the cooperative. However, the franchisee gives up control over how those local marketing funds are spent, as Carvel has sole discretion over their allocation.