Under what conditions can Carvel transfer its rights and obligations under the Franchise Agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
We may Transfer all of our rights and obligations under this Agreement, provided that: (i) we, in our sole discretion, determine that the transferee under the Transfer is able to perform our obligations under this Agreement; and (ii) the transferee agrees, in writing, to perform our obligations under this Agreement.
We are not required to obtain your
consent for our Transfer. Following the effective date of the Transfer, you will look solely to the transferee, and not to us, for the performance of all obligations in this Agreement.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel can transfer its rights and obligations under the Franchise Agreement to another entity without the franchisee's consent under specific conditions. Carvel must determine, in its sole discretion, that the transferee is capable of fulfilling Carvel's obligations under the agreement. Additionally, the transferee must agree, in writing, to perform these obligations.
Following the transfer, the franchisee is required to look solely to the new transferee for the performance of all obligations outlined in the Franchise Agreement. This means that Carvel is released from its responsibilities once the transfer is complete and the franchisee cannot hold Carvel liable for any future obligations.
This clause is standard in most franchise agreements, allowing the franchisor flexibility in business operations, such as mergers or acquisitions. However, it's crucial for a prospective Carvel franchisee to understand that their contractual relationship would shift to a new entity if Carvel exercises this right, and their recourse would then be against the transferee, not Carvel.