What does Carvel specify about the purchase of equipment for the Shoppe?

ntractor will not in any way be our endorsement of your architect or general contractor or render us liable for your architect's or general contractor's performance. When you refresh or remodel your Shoppe, we may require you to obtain, at your expense, a site survey and design solution from us, our affiliates, or a designated vendor.

You must purchase and install, at your expense, all fixtures, furnishings, equipment (including a Computer System), décor and signs, as we direct. If we modify our menu, we may require you to purchase additional equipment to prepare and store new menu items. You may not install on or about your Shoppe any merchandise, furnishings, interior or exterior décor items, supplies, fixtures, equipment or utensils unless they have been approved by us in writing. You must purchase these items only from an Approved Supplier unless we specify otherwise.

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.

We require you to accept major credit cards (Visa, MasterCard, American Express, and Discover) and other major payment methods (such as Apple Pay and Google Pay) for customer purchases,

participate in our Gift Card and Loyalty Programs, and participate in our in-shop mobile and online ordering program. These programs may require that you invest in additional equipment and incur fees from the credit card processing vendors, gift card processing vendors, and other hardware and software vendors that we designate.

We require you to purchase and maintain specific types of insurance coverage as described in more detail in the Franchise Agreement and the Manuals from insurance companies that meet our minimum Standards. We also specify the minimum amounts of insurance coverage you must maintain. All insurance policies must name us and others we designate as additional insureds. You must provide us with evidence of your insurance coverage before you begin operations at your Shoppe, upon annual renewal of your insurance, and otherwise within 10 days of our demand for proof. We reserve the right to obtain a master insurance policy on behalf of the System for certain types of coverage and require you to pay all or a portion of your proportionate share of coverage under the master policy to us or our Approved Supplier.

Currently, except as otherwise detailed above, you may purchase the remainder of the Goods that you use in your Shoppe from any source, as long as the Supplier and the Goods meet our minimum Standards. We may designate any Supplier as ineligible to supply Goods to you in our sole discretion. Further, we may designate one or more Approved Suppliers for any Goods upon written notice to you.

We or Our Affiliates as Approved Suppliers. Except as set forth in this paragraph, neither we nor our affiliates are currently Approved Suppliers for any Goods that you are required to purchase or lease. GoTo Supply provides supply chain, quality assurance, distribution, and logistics services to franchisees, and GoTo Rewards administers our gift card program, although neither are Approved Suppliers for any Goods. We and our affiliates reserve the right to become an Approved Supplier or the only Approved Supplier for any Goods in the future.

Interest in Approved Suppliers. Except through an interest in us or our affiliates, none of our officers owns any interest in any Suppliers with whom you must or are required or recommended to do business.

Approval Process. If you would like to offer products or use any Goods that we have not approved or to purchase or lease from a Supplier that we have not approved, you must submit a written request for approval and provide us with any information that we request. We have the right to inspect the proposed Supplier's facilities and test samples of the proposed Goods. You must pay us a charge not to exceed the reasonable cost of the inspection and our actual cost of testing the proposed Goods or evaluating the proposed Supplier, including personnel and travel costs, whether or not the Goods or Supplier is approved.

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 52–56)