Under what conditions must a Carvel franchisee pay the Relocation Extension Fee?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1, 4 | Amount | Date Due | Remarks |
|---|---|---|---|
| Relocation Extension Fee | $1,500 per year that the term is extended. | Before we sign relocation Franchise Agreement | If you relocate to a new site and we agree to extend the term of your Franchise Agreement (or enter into a new Franchise Agreement) to match the term of your new lease, you must pay the Relocation Extension Fee in addition to the Relocation Fee. |
Source: Item 6 — OTHER FEES (FDD pages 31–42)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee must pay a Relocation Extension Fee under specific circumstances related to relocating their shop. If a Carvel franchisee decides to move their shop to a new location that Carvel approves, and Carvel agrees to extend the term of the Franchise Agreement (or enter into a new agreement) to align with the term of the new lease, the franchisee is obligated to pay the Relocation Extension Fee. This fee is in addition to the standard Relocation Fee.
The Relocation Extension Fee is $1,500 per year that the term is extended. This fee is due before Carvel signs the relocation Franchise Agreement. This means that if the new lease extends the franchise term by, for example, five years, the franchisee would owe $7,500 for the Relocation Extension Fee, on top of the Relocation Fee, which is 10% of the then-current Initial Franchise Fee.
This fee structure incentivizes franchisees to carefully consider the length of their new lease term when relocating, as it directly impacts the cost of extending the franchise agreement. Prospective Carvel franchisees should factor in these potential relocation costs when evaluating the financial implications of moving their shop. Understanding these fees is crucial for making informed decisions about the long-term financial planning of their Carvel franchise.