Does the Circle K agreement create third-party beneficiary rights?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
iled to function properly, or (ii) repair or replace the TMC Software, or part thereof.
THE WARRANTY STATED ABOVE IS IN LIEU OF ALL OTHER WARRANTIES, AND TMC DOES NOT MAKE, AND FRANCHISEE DOES NOT RECEIVE, ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, AND TMC SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
2.5 Third Party Software. Franchisee agrees to license from third parties the software identified on Exhibit C to this Agreement and/or from time to time designated by TMC (the "Third Party Software"), and Franchisee agrees to pay to such third parties any license and maintenance fees or other costs charged by them for the use of such Third-Party Software. The Third-Party Software will be subject to and governed by the terms of the respective software license agreements between Franchisee and/or TMC and the third-party software providers. Franchisee agrees to promptly upgrade any Third-Party Software to such newer version or a different software solution as may be required by TMC from time to time.
2.6 Software Representations, Warranties, Covenants, and Indemnities.
- 2.6.1 Franchisee's Representations and Warranties; Indemnification.
- 2.6.1.1 Franchisee agrees not to use as part of the Circle K Systems any additional software not designated by TMC, without TMC's prior written consent.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Circle K franchise agreement involves third-party relationships, specifically with software and management firms. Franchisees are required to license software from third-party providers designated by Circle K and must pay any associated license and maintenance fees. These third-party software agreements are governed by the terms between the franchisee (or TMC, presumably Circle K's parent company) and the software providers.
Additionally, Circle K franchisees are obligated to work with a third-party management firm selected by Circle K for store construction and development. The services provided by these firms vary based on the construction and equipment needs for the store. The franchisee is responsible for covering the costs associated with using these management firms, although a portion of these costs may be covered by Equipment/Construction Funding, if applicable, as determined by Circle K.
While these arrangements establish relationships with third parties, the FDD excerpt does not explicitly state whether these third parties are intended to be direct beneficiaries of the franchise agreement itself. It outlines the franchisee's obligations to engage with these third parties and adhere to their respective agreements, but it does not clarify if these third parties have independent rights to enforce the franchise agreement's terms against the franchisee or Circle K. A prospective franchisee should seek clarification from Circle K regarding whether these third-party relationships create any explicit third-party beneficiary rights under the franchise agreement.