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D74/100FDD 2025

Carvel — Litigation & Risk

Food & Beverage - Ice Cream & Desserts · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
74 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
4
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$679K
Avg loan size
$170K
Participating lenders
4

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 74/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (3.1% YoY contraction indicates system shrinkage)
  2. 02MINORNo Item 19 financial disclosure — cannot verify if $484K avg revenue translates to positive ROI after 6% royalty + operating costs
  3. 03MINORUnprotected territory creates direct competition risk from other Carvel franchisees
  4. 04HIGHParent company litigation history (no-poaching + data breach) suggests operational/compliance vulnerabilities affecting franchise ecosystem
  5. 05MEDHigh investment range ($392K-$786K) with no disclosed net income data creates profitability opacity
  6. 06MINOR20-year commitment is lengthy given brand's contracting footprint and uncertain profitability

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.