Are Carvel franchisees required to use designated Approved Suppliers for point-to-point encryption (P2PE) solutions?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
You are required to purchase most of the components of the Computer System that we specify from Approved Suppliers. Currently, we have Approved Suppliers for our POS System and for certain software that you must use in your Shoppe, including the Learning Management System. We also require you to use designated Approved Suppliers for point-to-point encryption ("P2PE") solutions (hardware and software) that are used in cooperation with your POS System to provide secure and compliant payment processing services. Full Shoppes and Express Shoppes will be required to use this designated POS System; Hosted Express Shoppes and Ice Cream Trucks may use another, approved POS System with prior approval from us. If we require you to use any proprietary software or to purchase any software from a designated vendor, you must execute any software license agreements that we or the licensor of the software require and any related software maintenance agreements. We may require you to maintain certain network connections, which may include using an Internet Service Provider or other communications provider that we approve or designate. Currently, we require you to obtain the POS System from our designated vendor (and we may collect from you the related upfront and ongoing fees for such POS System and pay the vendor on your behalf) and POS System support services from our affiliate. We may require you to maintain other support service contracts and/or maintenance service contracts from us, our affiliates, or designated Approved Suppliers.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 52–56)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, franchisees are required to use designated Approved Suppliers for point-to-point encryption (P2PE) solutions. These P2PE solutions include both hardware and software components that work with the POS system to ensure secure and compliant payment processing services. This requirement applies specifically to Full Shoppes and Express Shoppes. Hosted Express Shoppes and Ice Cream Trucks have the option to use another approved POS System, but this is subject to prior approval from Carvel.
This mandate ensures that all Carvel locations meet the necessary security standards for payment processing, reducing the risk of data breaches and maintaining customer trust. By using designated Approved Suppliers, Carvel aims to provide a consistent and secure payment environment across all franchised locations. Franchisees must adhere to this requirement to maintain compliance with Carvel's operational standards.
For prospective franchisees, this means they will not have the freedom to choose their own P2PE solutions or suppliers. Instead, they must use the vendors approved by Carvel, which may impact their initial investment and ongoing operational costs. It is important for potential franchisees to understand the terms and conditions associated with these designated suppliers, including costs, service agreements, and support services. Franchisees should also inquire about the process for POS system support, as Carvel currently requires franchisees to obtain POS system support services from its affiliate.