Does the definition of 'Affiliate' for a Circle K franchise include Circle K Stores Inc.?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to terms defined elsewhere in this Agreement, for purposes of this Agreement, the following terms will have the following meanings:
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- "Affiliate" means, with respect to a party hereto, any person or entity that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party.
The term "control" of an entity means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise.
For avoidance of doubt, an affiliate of Franchisor includes, without limitation, Circle K Stores Inc. and any of its subsidiaries, and Alimentation Couche-Tard and any of its subsidiaries, now existing or hereinafter formed or acquired.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the definition of "Affiliate" includes Circle K Stores Inc. The FDD specifies that an affiliate of the franchisor includes, without limitation, Circle K Stores Inc. and any of its subsidiaries, as well as Alimentation Couche-Tard and its subsidiaries, whether currently existing or formed/acquired in the future.
This definition is important for prospective franchisees because it clarifies the scope of entities that are related to the franchisor. Understanding the definition of "Affiliate" helps franchisees understand the relationships between different entities within the Circle K organization. This can be relevant in various contexts, such as understanding who the franchisor can assign the agreement to, who is covered by certain rights and reservations, and who the franchisee might interact with during the course of the franchise relationship.
The definition of "Affiliate" also specifies what "control" means in this context, defining it as the power to direct the management and policies of an entity, whether through ownership of voting securities, by contract, or otherwise. This clarification helps to avoid ambiguity in determining which entities are considered affiliates. This broad definition of 'Affiliate' and 'control' ensures that all related entities are bound by the terms and conditions of the franchise agreement, protecting the Circle K brand and business system.
In practical terms, this means that Circle K Stores Inc. is considered part of the Circle K franchise system, and the franchisor can enforce the franchise agreement against Circle K Stores Inc. as an affiliate. Franchisees should be aware of this relationship as it may impact their interactions and obligations within the Circle K franchise network.