A dispute with franchisees came to a head in 1962. Independent owners attempted to buy products from outside the corporate supply chain (in conflict with their contracts), maintaining that the company was deliberately overcharging them. Carvel argued that the franchisees were trying to use inferior ingredients. As well as the immediate impact on corporate cash flow, this hurt the corporate image, reducing the chain to 175 stores. When the corporation tried to enforce this contract, the Federal Trade Commission sued them for restraint of trade. Legal proceedings reached the Supreme Court of the United States in 1964, with the corporation emerging victorious.