factual

Can Carvel use the Ad Fund for guest response programs?

Carvel Franchise · 2025 FDD

Answer from 2025 FDD Document

iate will administer the Ad Fund. We have sole authority to direct all advertising programs and promotions and uses of the Ad Fund, with sole control over the creative concepts, materials, and media used in the programs, and the placement and allocation of advertising. We reserve the right to use any media, create any programs, and allocate advertising and promotional expenditures to any regions or locales we deem appropriate.

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;

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 guest response programs. Carvel may use the Ad Fund to cover the costs of administering national, local, or regional advertising, promotional, or brand-building programs, including guest response programs.

Specifically, the Ad Fund can be used for various activities designed to promote the Carvel system, its franchisees, and increase sales. These activities include limited-time menu offerings, crew incentives, franchisee incentive programs, customized materials, up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, mystery shopper programs, brand websites and ordering platforms, brand applications, social media account administration, and in-shop equipment related to marketing programs.

In Fiscal Year 2024, 10% of the Ad Fund was allocated to guest response programs and menu innovation projects. This demonstrates Carvel's commitment to using the Ad Fund for initiatives directly related to customer feedback and menu development. This allocation also covered menu innovation projects, so franchisees should note that the 10% figure encompasses both types of initiatives, not solely guest response programs.

Carvel retains sole authority over advertising programs and the use of the Ad Fund, including creative concepts, materials, media, and the allocation of advertising. While Carvel's Franchise Advisory Council provides suggestions on advertising issues, Carvel ultimately has the final decision-making power. This means that while franchisees can offer input, Carvel is not obligated to follow their suggestions regarding the use of the Ad Fund.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.