Under what conditions might Carvel require a franchisee to sign a new franchise agreement when relocating a Carvel Franchised Business?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
chised Business at your expense, if, prior to closing the Franchised Business, you submit a site acceptance request (in the form we provide to you) for your new Proposed Location and obtain our acceptance of the relocation to the Proposed Location. A relocation includes any change of
the location of the Franchised Business within a mall, facility, or building to a new location within the same mall, facility, or building. We are under no obligation to approve a relocation of the Franchised Business. Approval under this Section 5.5 will be within our sole discretion, and such approval shall not be granted unless you are in compliance with all terms and conditions of this Agreement and you have the funds available to relocate the Franchised Business and construct a new Franchised Business according to our then-current design standards.
- B. Relocation Conditions. If we approve, in our sole discretion, the relocation of the Franchised Business under this Section 5.5, you agree to comply with the following conditions:
- (i) the new location will be considered the "Accepted Location" as used in this Agreement;
- (ii) all Site Agreements you enter into to secure the new location must comply with Section 5.4 (Site Acquisition);
- (iii) you must make or cause to be made to the former Accepted Location such changes in the signs and interior and exterior of the former Accepted Location so as to effectively distinguish such location from any other Business;
- (iv) we may charge you a relocation fee equal to 10% of the then-current Initial Franchise Fee to cover costs and expenses incurred by us or our affiliates in connection with any such acceptance, evaluation, and relocation of the Franchised Business;
- (v) we may require you to pay an agreed minimum royalty to us during the period in which the Franchised Business is not in operation (if any); and
- (vi) we may require you to sign our t
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, when a franchisee seeks to relocate their Carvel store, Carvel has the option to mandate the signing of a new franchise agreement. This new agreement would supersede the existing one.
The FDD specifies that the terms of this new franchise agreement may differ significantly from the original agreement. However, a franchisee relocating their business will not be required to pay another initial franchise fee if they sign a new franchise agreement.
Furthermore, if the lease term for the new location extends beyond the original term of the franchise agreement, Carvel may extend the term of the agreement (or the new agreement) to match the lease term. In this case, the franchisee would be required to pay a relocation extension fee. This fee is calculated as $1,500 multiplied by the number of years between the original expiration date and the new lease expiration date.