Under what condition can Carvel suspend support services to a franchisee?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of a Franchisee Default (as defined below), Company reserves the right, but not the obligation, to suspend part or all of the Support Services until such Franchisee Default is cured; provided however, that Franchisee shall continue to pay Service Fees, during the Term of the Agreement notwithstanding any suspension of Support Services due to a Franchisee Default.
Franchisee Default.
Each of the following shall constitute a default under this Agreement, if not cured within ten (10) days following Franchisee's receipt of a written notice of such default (each a "Franchisee Default"): (i) Franchisee fails to pay, when due, any Service Fees; (ii) Franchisee fails to perform its obligations under this Agreement or defaults under any other agreement with Company, Franchisor, and/or each of their respective affiliates, or (ii) Franchisee fails to satisfy and maintain the Minimum Specifications and other pre-requisites for Support Services under this Agreement.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel's affiliate Company reserves the right to suspend support services to a franchisee under specific circumstances. If a franchisee is in default of their agreement, the Company has the right, but not the obligation, to suspend part or all of the Support Services until the default is resolved.
However, even if Carvel suspends support services due to a franchisee default, the franchisee is still obligated to continue paying the Service Fees throughout the term of the agreement. This means a franchisee could be paying for support they are not actively receiving if they are in default.
A franchisee default is defined as failing to pay Service Fees when due, failing to perform obligations under the agreement, defaulting under any other agreement with Company, Franchisor, and/or each of their respective affiliates, or failing to satisfy and maintain the Minimum Specifications and other pre-requisites for Support Services under this Agreement. The franchisee has ten days after written notice to cure the default.