(Modified graphics) FRANCHISE DISCLOSURE DOCUMENT ISSUANCE DATE: APRIL 1, 20452014 CARVEL CORPORATION A Delaware corporation 200 Glenridge Point Parkway, Suite 200 Atlanta, Georgia 30342 (404) 255-3250 [email protected] www.carvel.com © 20432014 Carvel Corporation. All rights reserved. Carvel Franchise Disclosure Document -W^K (MoMed);^^^^ ^ ^ CARVEL CORPORATION A Do la ware corporation 200 Glonridgo Point Parkway, Suite 200 Atlanta, Georgia 30342 [email protected] www.carvol.com CARVEL CORPORATION ^hmm^m^m 200 Glenridge Point Parkway. Suite 200 Atlanta. Georgia 30342 (404) 255-3250 FRANCHISE DISCLOSURE rtrtm IMCMT , FRANCHISE DISCLOSURE DOCUMENT You will operate a Carvel® Ice Cream Shoppe. Carvel® Ice Cream Shoppes are retail Shoppes that sell soft serve ice cream, hand dipped ice cream, novelties and ice cream cakes. The total investment necessary to begin operation of a Carvel® Full Shoppe ranges from $240 375 to $364.550249.300 to $381.100 This total investment estimate for a Full Shopped includes a $30.000 initial franchise fee that must be paid to us. The total investment necessary to begin operation of a Carvel® Express Shoppe ranges from $24.10037.100 to $74^560118,900. The total investment necessary to begin operation of a Carvel® Hosted Express Shoppe located in a new Sohlotzsky's Restaurant ranges from $31,734 to $37,954. Tho total investment necessary to begin operation of a Carvol® Exproco Shoppo located in a now Moe's Southwest Grill Restaurant ranges from $20,900 to $37,855. Tho total invostmont necessary to begin operation of a Carvel® Express Shoppe located in a new Cinnabon Bakory rnnoofl from $26.490 to $39.40030.800 to $51.500. These total investment estimates for Express Shopoes and Hosted Express Shoppes include a $7.500 initial franchise feesfee that must be paid to us: a $30,000 initial franchise foe for a Full Shoppo or, depending on the menu format, either a $2,500 or $7,500 initial franchise feo for an Express Shoppe. These total investment estimates also include your cost to purchase a designated PCS System, which currently ranges from $3,100 for one register to $6,200 for two registers (the initial cost estimate includes software support and maintenance and hardware maintenance for the first year), that must be paid to our affiliate. This Disclosure Document summarizes certain provisions of your franchise agreement, territory agreement and other information in plain English. Read this Disclosure Document and all accompanying agreements carefully. You must receive this Disclosure Document at least 14 calendar-days before you sign a binding agreement with, or make any payment to, the franchisor or an affiliate in connection with the proposed franchise sale. Note, however, that no governmental agency has verified the information contained in this document. You may wish to receive your Disclosure Document in another format that is more convenient for you. To discuss the availability of disclosures in different formats, contact our sales department at 200 Glenridge Point Parkway, Suite 200, Atlanta, Georgia 30342 and 404-255- 3250 or [email protected]. Carvel Franchise Disclosure Document <i i ooiavM 1 2014 The terms of your contract will govern your franchise relationship. Don't rely on the Disclosure Document alone to understand your contract. Read all of your contract carefully. Show your contract and this Disclosure Document to an advisor, like a lawyer or an accountant. Buying a franchise is a complex investment. The information in this Disclosure Document can help you make up your mind. More information on franchising, such as "A Consumer's Guide to Buying a Franchise," which can help you understand how to use this Disclosure Document, is available from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. You can also visit the FTC's home page at www.ftc.gov for additional information. Call your state agency or visit your public library for other sources of information on franchising. There may also be laws on franchising in your state. Ask your state agencies about them. The issuance date of this Franchise Disclosure Document is April 1,20432014. Carvel Franchise Disclosure Document 4.i.aoi3va4.1.2014 STATE COVER PAGE Your state may have a franchise law that requires a franchisor to register or file with a state franchise administrator before offering or selling in your state. REGISTRATION OF A FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT. Call the state franchise administrator listed in Exhibit G to this Disclosure Document for information about the franchisor or about franchising in you state. MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW. Please consider the following RISK FACTORS before you buy this franchise: [1] THE FRANCHISE AGREEMENT AND TERRITORY AGREEMENT PERMIT YOU TO ARBITRATE OR SUE ONLY IN GEORGIA. OUT-OF-STATE ARBITRATION OR LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT ALSO MAY COST MORE TO ARBITRATE WITH OR SUE CARVEL IN GEORGIA THAN IN YOUR HOME STATE. CERTAIN STATES HAVE LAWS THAT SUPERSEDE THIS REQUIREMENT. SEE THE STATE ADDENDA TO THE FRANCHISE AGREEMENT AND TERRITORY AGREEMENT, AND THE STATE ADDENDA TO THE DISCLOSURE DOCUMENT. [2] THE FRANCHISE AGREEMENT AND TERRITORY AGREEMENT STATE THAT GEORGIA LAW GOVERNS THESE AGREEMENTS. THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS. EVEN THOUGH THE FRANCHISE AGREEMENT PROVIDES THAT GEORGIA LAW APPLIES, LOCAL LAW MAY SUPERSEDE THIS REQUIREMENT IN YOUR STATE. SEE THE STATE ADDENDA TO THE FRANCHISE AGREEMENT AND TERRITORY AGREEMENT, AND THE STATE ADDENDA TO THE DISCLOSURE DOCUMENT. [3] CARVEL GRANTS YOU NO TERRITORIAL RIGHTS OTHER THAN THOSE FOR THE PREMISES OF THE CARVEL SHOPPE UNDER THE FRANCHISE AGREEMENT. SEE ITEM 12 OF THIS DISCLOSURE DOCUMENT. CARVEL AND/OR OTHER THIRD PARTIES MAY COMPETE WITH YOU BY ITS/THEIR SALES TO SUPERMARKETS, CONVENIENCE STORES AND OTHER BUSINESSES OR DIRECT TO CONSUMERS. [4] THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE. The effective dates of this Franchise Disclosure Document in the states with franchise registration laws in which we have sought registration appear on Attachment 1. Carvel Franchise Disclosure Document 412oi3v24 1 2014 ^HEEOLLO^GAP^ESTOTRANSA^ONSGOVERNEOBY THE MIC^GANFRANC^E INVESTMENT LA^ONL^ THESTATE OE MICHIGAN PROHIBITS CERTAIN ONEAIR PRCVISICNSTHAT ARE SOMETIMES IN ERANCHISE OCCUMENTS IE ANY OE THE EOI^O^INO PROVISIONS ARE IN THESE ERANCHISE OOCOMENTS^THE PROVISIONS ARE VOIOANO CANNOT BEENEORCEOAOAINSTYOO. Each of thefo^wiog provisions is void and unenforooabio if oontainod in any dooumonts bating toafranohise: (a) Aprohibitionontheng^ofafranohisooto^oin an association offranohisoes (b) A roqoiremontthat a franchisee assentto a release, assignment novation, waiver, or estoppel which deprivesafranch^ This shall not preclodeafranchisee, after entering intoafranchise agreement, from settling any and all claims (c) A provision that permits a franchisor to terminate a franchise prior to the expirationof its term except for goodcaose Ooodcause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice th^ need be more than 30 days, to cure such failure. (d) Aprovision that permitsafranchisor to refuse to renewafranchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings Personalized materials which have no value to the franchisor and inventory, supplies, equipment,fixtures,and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation This subsection applies only if: ^thetermofthe franchise is less than^years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least^months advance notice offranchisor's intent not to renewthe franchise (e) Aprovisionthatpermitsthefranchisorto refuse to renewafranchise on terms generally available to other franchisees of the same class or type under similar circumstances This section does not requirearenewal provision (f) Aprovision requiringthatarbitrationorlitigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitrat^^^ to conduct arbitration atalocation outside this state (g) Aprovisionwhich permitsafranchisor to refuse to permitatransfer of ownership of afranchise, except for goodcause This subdivision doesnotpreventafranchisor from exercisingarightoffirstrefusaltopurchasethefranchise Good cause shall include, but is not limited to: (i) Thefailureofthe proposed transferee to meet the franchisor's