What did the Defendant allege TMC failed to do under the Circle K franchise agreement in their cross-complaint?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
d 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. TMC disputed all material allegations against it and that Defendant was entitled to any purported damages Promptly after the filing of the cross-complaint, TMC filed a demurrer requesting the court to dismiss the cross-complaint in its entirety, as well as a motion to strike portions of the cross-complaint, including the damages requested, as contrary to well-established California law. The Court granted the demurrer in part and limited Defendant's right to claim damages. The parties settled the dispute on December 29, 2022, pursuant to which settlement Defendant paid TMC $30,722, and the parties entered into mutual releases of liability and filed a stipulation of dismissal, with prejudice, of the
Source: Item 3 — LITIGATION (FDD pages 17–20)
What This Means (2025 FDD)
According to the 2025 Circle K Franchise Disclosure Document, a cross-complaint was filed against TMC Franchise Corporation (TMC) by Broadway Restaurants, Inc. (BRI) on September 17, 2021, seeking damages in excess of $5,000,000. The Defendant alleged that TMC failed to comply with its obligations under the Circle K franchise agreement.
Specifically, BRI claimed that TMC failed to advertise the Defendant's Circle K store, engaged in price fixing, and failed to deposit rebates to the Defendant. BRI 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.
TMC disputed all material allegations and filed a demurrer requesting the court to dismiss the cross-complaint and a motion to strike portions of the cross-complaint, including the damages requested. The Court granted the demurrer in part and limited Defendant's right to claim damages. Ultimately, the parties settled the dispute on December 29, 2022, with the Defendant paying TMC $30,722, and both parties entering into mutual releases of liability and filing a stipulation of dismissal, with prejudice, of the lawsuit.