Can Carvel use the Ad Fund for crew incentives?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the Ad Fund to meet the costs of administering, preparing, and conducting national, local, or regional advertising, promotional, or brand building programs of any kind, including the cost of (i) preparing and conducting television, radio, magazine, newspaper, and digital advertising campaigns and other public relations activities (including, but not limited to, for purposes of brand reputation management), (ii) employing public relations firms and advertising agencies to assist in these activities, and (iii) conducting other activities that are directly or indirectly designed to promote the System, its franchisees, and/or increase System sales, such as limited-time menu offerings, crew incentives, franchisee incentive and/or promotional programs, customized materials (e.g., cups), up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, mystery shop and shopper programs, brand websites and ordering platforms, brand applications, social media account administration and promotion, and in-shoppe equipment and technologies related to such marketing programs. We may use the Ad Fund to compensate us for the reasonable administrative costs and overhead we incur in activities related to advertising and promotional programs, including new product development; market research; preparing advertising and promotional materials; Digital Marketing (as defined below); working with public relations firms, advertising agencies, advertising placement services, and creative talent; reimbursing franchisee advisory council meeting expenses; developing and maintaining, and paying third parties for the development and maintenance of, internet sites, applications, and other equipment and technologies related to marketing programs.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 59–74)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Ad Fund can be used for crew incentives. Carvel has the authority to use the Ad Fund for various advertising, promotional, and brand-building programs. This includes the cost of preparing and conducting advertising campaigns across different media, employing public relations firms and advertising agencies, and conducting activities designed to promote the Carvel system and increase sales.
Specifically, the Ad Fund can be used for activities such as limited-time menu offerings, crew incentives, franchisee incentive and/or promotional programs, customized materials, up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, mystery shop and shopper programs, brand websites and ordering platforms, brand applications, social media account administration and promotion, and in-shoppe equipment and technologies related to such marketing programs.
Carvel retains sole authority to direct all advertising programs and promotions and uses of the Ad Fund, including control over creative concepts, materials, media, and the allocation of advertising. While a Franchise Advisory Council provides suggestions on advertising issues, Carvel is not obligated to follow these suggestions. This means that while Carvel can use the Ad Fund for crew incentives, the decision to do so is at their discretion.