Besides rescission, what other monetary remedies did the defendants seek from Circle K in their counterclaims?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Defendants filed counterclaims alleging that certain inventory-related terms of the franchise agreement were unconscionable and alleging incomplete disclosures during the franchise sales process in violation of Florida's Unfair and Deceptive Trade Practices Act. Defendants sought rescission of the franchise agreement, return of all money paid by Defendants, any other damages necessary to return the parties to a pre-contractual state, damages available under Florida's Unfair and Deceptive Trade Practices Act, and attorneys' fees and costs.
TMC Franchise Corporation v. Broadway Restaurants, Inc., Zuri Barnes, Case No. 21STCV 19544 (Los Angeles County Sup. Ct.). On September 13, 2019, TMC terminated for cause the Circle K franchise agreement with Broadway Restaurants, Inc. ("BRI"), after BRI failed to cure its defaults under the franchise agreement, following several opportunities to cure provided by TMC. Following the termination, TMC made multiple attempts to contact BRI to cause BRI to comply with its post-termination obligations. When such attempts proved unsuccessful, on May 25, 2021, TMC filed this action against BRI and Zuri Barnes,
BRI's guarantor under the terminated franchise agreement (collectively with BRI, the "Defendant"), due to the Defendant's failure to comply with its post-termination obligations under its terminated franchise agreement, including failure to de-identify the Circle K store operated under the franchise agreement and failure to pay liquidated damages as required under the franchise agreement. TMC sought damages of $61,444 as well as recovery of attorneys' costs and fees. Defendant filed a cross-complaint on September 17, 2021, seeking damages in excess of $5,000,000 and alleging that TMC failed to comply with its obligations under the Circle K franchise agreement, including failing to advertise Defendant's Circle K store, engaging in price fixing, and failing to deposit rebates to Defendant, which actions the Defendant further alleged constituted a breach of the implied covenant of good faith and fair dealing, and unfair business practices under California Business & Professions Code section 17200.
Plaintiffs alleged damages in excess of $10 million against TMC and Circle K Stores.
The amended complaint included common law and statutory claims alleging that TMC and Circle K Stores made misrepresentations and omissions in connection with the sale of 17 existing corporate-owned Circle K® convenience stores to Plaintiffs in 2019.
The amended complaint also alleged that Circle K Stores wrongfully invoiced the franchisee under amended inventory agreements.
Source: Item 3 — LITIGATION (FDD pages 17–20)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, in the case of TMC Franchise Corporation et al. v. Golen, et al., the defendants sought several monetary remedies from Circle K in their counterclaims, in addition to rescission of the franchise agreement. These included the return of all money they had paid to Circle K, any other damages necessary to return the parties to a pre-contractual state, damages available under Florida's Unfair and Deceptive Trade Practices Act, and attorneys' fees and costs. This case was resolved through a settlement agreement effective April 27, 2020.
In another case, TMC Franchise Corporation v. Broadway Restaurants, Inc., the defendant filed a cross-complaint seeking damages in excess of $5,000,000. The defendant alleged that Circle K failed to comply with its obligations under the franchise agreement, including failing to advertise the Defendant's Circle K store, engaging in price fixing, and failing to deposit rebates to the Defendant. The defendant further alleged that these actions constituted a breach of the implied covenant of good faith and fair dealing, and unfair business practices under California Business & Professions Code section 17200. The court granted a demurrer in part and limited the defendant's right to claim damages. The parties settled the dispute on December 29, 2022.
In the case of Universal Property Services, Inc., et al. v. Lehigh Gas Wholesale Services, Inc., et al., the plaintiffs alleged damages in excess of $10 million against TMC and Circle K Stores. The amended complaint included common law and statutory claims alleging that TMC and Circle K Stores made misrepresentations and omissions in connection with the sale of 17 existing corporate-owned Circle K® convenience stores to Plaintiffs in 2019. The amended complaint also alleged that Circle K Stores wrongfully invoiced the franchisee under amended inventory agreements.