Besides the Seller and Purchaser, does the Circle K franchise agreement create third-party beneficiary rights for any person or entity, and if so, who?
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.
- (e) Control. Licensee is an independent businessman with the exclusive right to direct and control the business operation at the Premises, including the establishment of the prices at which products and merchandise are sold. TMC reserves no control over the business at the Premises. Licensee has no authority to employ anyone as an employee or agent of TMC for any purpose.
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 for any person or entity other than the Seller and Purchaser. However, there is an exception: any indemnified party, or other person entitled to indemnification under the agreement, is considered a third-party beneficiary. This means that if a party is entitled to be protected from losses or liabilities under the agreement's indemnification provisions, they have rights as a third-party beneficiary.
This clause clarifies that only those explicitly indemnified under the Circle K agreement can claim rights as third-party beneficiaries. This is a fairly standard practice in franchising, as it limits the scope of who can bring a claim under the agreement. Without this clause, other parties might try to assert rights, potentially complicating legal matters.
For a prospective Circle K franchisee, this means understanding the indemnification clauses within the franchise agreement is crucial. If the franchisee is required to indemnify Circle K or other parties, those parties would have certain rights as third-party beneficiaries. Conversely, the franchisee would only have third-party beneficiary rights if they are explicitly entitled to indemnification under the agreement. It is important to carefully review the agreement with legal counsel to fully understand these implications.