Under what conditions is a Carvel franchisee prohibited from assigning the franchise agreement?
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 is generally prohibited from assigning the Franchise Agreement without Carvel's prior written consent. This includes assignments by operation of law or any change of control. Any attempt to assign the agreement without this consent is considered null and void from the beginning.
However, there are exceptions. If a franchisee sells or transfers the franchised business, the Franchise Agreement terminates, and the new owner must execute Carvel's current Service Level Agreement. If Carvel approves an assignment of the Franchise Agreement, the agreement is then assigned to the new assignee, who assumes all the franchisee's rights and obligations under the agreement.
Carvel, on the other hand, can assign the agreement to any person or entity without the franchisee's consent. The agreement is binding on both parties and their respective successors and permitted assigns. This clause ensures Carvel retains flexibility in its business operations while setting clear conditions for franchisees wishing to transfer their business.