Does the Circle K agreement create any third-party beneficiary rights, and if so, are there any exceptions?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) No Third-Party Beneficiary. Nothing contained in this Agreement shall be deemed, interpreted, or construed to create, or express any intent to create, third party beneficiary rights in favor of any person or entity, except for any indemnified party (or other person entitled to be indemnified pursuant to this Agreement), and TMC and Licensee specifically state and agree that no such intent exists.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the franchise agreement generally does not create third-party beneficiary rights. This means that individuals or entities who are not directly party to the agreement (i.e., Circle K and the franchisee) typically cannot claim any rights or benefits under it.
However, there is a specific exception to this rule. The agreement states that third-party beneficiary rights do exist for any indemnified party or other person entitled to indemnification under the agreement. In simpler terms, if a party is protected by an indemnity clause within the Circle K franchise agreement, they are considered a third-party beneficiary and can enforce their rights accordingly. Indemnification clauses typically require one party (usually the franchisee) to protect the other party (Circle K) from losses or liabilities arising from specific events or actions.
This exception is important for prospective Circle K franchisees to understand. While the agreement aims to limit third-party claims, it explicitly allows certain parties who are entitled to indemnification to benefit from and enforce the agreement's terms. Franchisees should carefully review the indemnification provisions to understand who these third-party beneficiaries might be and what rights they hold.