Carvel Corporation

The Carvel Corporation is an American success story. Through hard work and luck its founder and President Tom Carvel turned a dream into a million dollar success. Thomas Andreas Carvelas was born July 14, 1906, in Athanassos Greece in 1910 his family immigrated to Danbury, Connecticut and finally settled in New York City in 1920. Ever since he was a child he has always dreamed of owning his own frozen custard shop. His first break came Memorial Day 1934 when he borrowed $15 dollars from his future wife Agnes Stewart, and bought a trailer load of custard to sell to vacationers in Westchester County, New York. He suffered a setback when his trailer got a flat tire in Hartsdale NY but luck was on his side. Pop Quinlan a pottery shop owner across the street allowed him to use his electricity to keep the custard from melting, Mr. Carvel continued selling from his broken down trailer for many years, this is how he became the nation's first retail ice cream company. Tom Carvel kept his trailer on the pottery lot. The first year he grossed $3,500.00. In 1937 he turned the trailer into a frozen custard stand and by 1939 his yearly gross income was $6,000 a year and he became known as the "Ice Cream King of the East".

Tom Carvel developed his own freezer model, known as the batch freezer (this was only one of his 500 other patents, trademarks and copyright registration). In 1947, under the trade name "Custard King" he sold about 71 freezers for $2,900 each. Not long after selling the freezers many of the buyers started defaulting on their payments for their freezers. Tom Carvel discovered that poor locations, and cleanliness of their shops was the cause for the defaulted payments. He was determined to make his venture successful, and decided to oversee the operations of the freezers directly. Potential Franchise owners in the Carvel Corporation bought equipment and supplies from Mr. Carvel and used the Carvel name. In return the corporation helped them select a location and taught them how to run an ice cream business, this was all taught at the Carvel College an eighteen-day course for potential franchise owners. As a result of this strategy he claimed to have developed the franchise concept in 1949.

Carvel Corp. is known for many of their unique elements in the business. Tom Carvel introduced the marketing concept of "Buy One Get One Free" in 1936 and gift certificates in 1954. But of all the sales promotions, it was the specialty products that kept the customers coming back for more. For instance, the flying saucer ice cream sandwich, "Papapalooza", the famous Fudgie the Whale and ice cream cakes layered with chocolate crunchies for every holiday like Tom the Turkey for Thanksgiving. Carvel Corporation holds the Guinness record for the Largest Ice Cream Pyramid achieved in 2002 and the Largest Ice Cream Cake achieved in 2004.

The Carvel Corporation continued to enjoy success and expansion until 1962 when many franchise owners began buying cheaper ingredients and the chain was reduced to 175 stores. Carvel insisted that the franchise owners agreed to purchase raw ingredients from Carvel. When the Corporation tried to enforce the agreement, the Federal Trade Commission charged Carvel with allegations of coercion and restraint of trade. Despite the odds against his victory in 1964 Mr. Carvel won his case.

Through his hard work, and creativity Mr. Carvel built up his ice cream chain and turned his dreams into reality. In 1957 his achievements were recognized when he was awarded the Horatio Alger Award (an award that honors the achievements of outstanding individuals in our society in spite of adversity). In 1989, Mr. Carvel sold the Carvel Corporation to an international investment company, Investcorp, for more than 80 million dollars. Tom Carvel died in 1990.

While under Investicorp, Carvel Corp. dropped from 1,000 stores to 400 in as little as 11 years, while other ice cream chains were booming Carvel Corp. was dropping dramatically. In 1993 Investicorp started one major marketing concept that helped the Carvel name survive they became the first branded name ice cream cake distributor in supermarkets across America.

On December 10th 2001, Roark Capital Group a private equity firm purchased preferred stock convertible into a majority ownership in Carvel for $30 million dollars, while Investicorp retained a minority position