Risk Score
Pending analysis
Investment Range
$38,800 - $1,099,500
Franchise Fee
$5,500
Total US Locations
336
Business Summary
Carvel Ice Cream Shoppes are retail outlets that sell a variety of soft-serve ice cream, hand-dipped ice cream, novelties, and ice cream cakes. Carvel's products include unique ice cream and frozen desserts that can be custom-shaped and decorated for any occasion.
Corporate History
The Carvel brand has been associated with the ice cream business since 1934. Carvel Franchisor SPV LLC, the current franchising entity, was organized in Delaware in 2017 and began offering franchised shoppes in April 2017. Its predecessor, Carvel LLC (formerly Carvel Corporation, established in 1946), offered Carvel franchises from 1947 until April 2017. Carvel became affiliated with GoTo Foods (formerly Focus Brands LLC), an indirect parent company for several other franchise systems, in 2004.
Financial Overview
Investment Range
$38,800 - $1,099,500
Franchise Fee (Low)
$5,500
Franchise Fee (High)
$61,000
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$19,550
Equipment Costs (High)
$792,700
Working Capital
$45,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The guarantor of Carvel Franchisor SPV LLC's obligations, GoTo Foods Systems LLC, has audited financial statements showing positive member's equity of $285,638,000 as of December 29, 2024, and net income of $253,964,000 for the fiscal year ended December 29, 2024. Its independent auditors issued an unqualified opinion, indicating the financial statements present fairly the company's financial position. The indirect parent company, GoTo Foods LLC, has a member's deficit but also shows strong cash flow from operating activities and the auditors did not raise any going concern issues.
Financing Details
Carvel Franchisor SPV LLC does not offer any direct or indirect financing to franchisees. This includes not guaranteeing any notes, leases, or other obligations. However, Carvel may refer prospective franchisees to unaffiliated leasing or financing companies, though Carvel and its affiliates do not receive any fees or financial benefits from these referrals.
Performance Metrics
Total US Locations
336
Franchised Units
336
Corporate Units
0
Avg Square Footage
1,200
Franchising Since
2017
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
3
Litigation Summary
Carvel Franchisor SPV LLC has disclosed three past legal actions involving its affiliates, Arby's Restaurant Group, Inc. and Dunkin' Brands, Inc. These cases, all filed in 2019 and settled by 2020, concerned allegations of "no-poaching" provisions in franchise agreements and, in one instance for Dunkin' Brands, a credential-stuffing cyberattack. Carvel expressly denied any wrongdoing in these settlements. None of these actions allege unlawful conduct by Carvel itself or have any impact on the Carvel brand.
Bankruptcy History
Carvel Franchisor SPV LLC has no bankruptcy history to disclose in its FDD.
Agreement Terms
Initial Term
20 years
Renewal Term
20 years
Renewal Conditions
To renew their franchise agreement, Carvel franchisees must submit a written request at least 6 to 12 months before their current term expires and complete a renewal application. They must have substantially and timely complied with all provisions of their franchise agreement and any other agreements throughout the term, with no defaults existing at expiration. Before the renewal term begins, franchisees need to commit to significant capital expenditures for a remodel within six months. They also must secure the right to continue operating at their accepted location or relocate if it doesn't meet current standards. Finally, franchisees must sign Carvel's then-current renewal agreement (which may have materially different terms), pay a renewal fee equal to 20% of the then-current initial franchise fee, and sign a general release. For co-branded shoppes, they must also secure renewal rights from the co-branded franchisor.
Training & Support Program
Franchisor Assistance
Carvel Franchisor SPV LLC provides comprehensive support to its franchisees, starting with pre-opening assistance in site selection, ensuring locations meet criteria, and reviewing architectural plans. They approve general contractors and architects for shoppe construction. Initial management training is provided for two managers at no extra charge for the first two shoppes, covering operations, food safety, equipment, shift management, inventory, ordering, scheduling, guest recovery, retail technology, financials, and marketing. Carvel also offers initial on-site opening training and assistance for the first two shoppes. Post-opening, ongoing support includes continuously identifying and approving suppliers, managing the advertising fund, updating operational standards and manuals, and reviewing franchisee advertising materials. General support services are available on-site, off-site, by telephone, or through other means. Carvel also reviews remodeling plans and assists with relocation requests.
Initial Training Hours
95
Training Location
Online and at Certified Training Locations designated by Carvel
Ongoing Support
Carvel Franchisor SPV LLC provides ongoing support to its franchisees after their shoppes open. This includes continually identifying approved suppliers for goods and reviewing any proposed new suppliers or products. The franchisor manages the advertising fund, updates and provides notice of any changes to its operational standards and manuals, and reviews franchisee-proposed advertising. Carvel offers general support services on-site, off-site, by telephone, or through other means, depending on staff availability. Additionally, Carvel reviews and approves general contractors, proposed designs, furniture, fixtures, equipment, and décor when franchisees refresh or remodel their shoppes, and evaluates requests for shoppe relocation.
Franchise Requirements
Ideal Candidate Profile
Carvel Franchisor SPV LLC seeks franchisees who are at least 18 years old and have management experience as a restaurant owner or operator. Candidates must successfully pass a financial credit check, a basic English language competency test, and a criminal background check. While owners are not required to participate in the actual day-to-day operation, Carvel does not recommend the investment for individuals primarily interested in an absentee management business, indicating a preference for engaged operators who will ensure qualified management.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Carvel Franchisor SPV LLC's territories are defined on a case-by-case basis. For Co-Branded Shoppes in Streetside Locations, a protected territory (Area of Protection) will be granted, not exceeding a one-block radius in urban areas or a one-mile radius in non-urban areas. There is no minimum size for these protected areas. For all other types of Carvel Shoppes, there are no protected territorial rights, and franchisees may face competition from other Carvel outlets or alternative distribution channels.
Staffing Notes
Carvel Franchisor SPV LLC requires each franchised shoppe to employ at least two managers who have successfully completed the Management Training Program and are dedicated to the business. These managers must have day-to-day management responsibility, exercise on-premises supervision, and personally participate in the direct operation of the shoppe. If the franchisee operates four or more shoppes, Carvel may also require one or more additional managers to serve as Directors of Operations, responsible for supervising and supporting multiple locations. Franchisees must promptly notify Carvel of any manager's or Director of Operations' departure and designate a successor within 30 days.