What are the exclusive remedies available to a Circle K franchisee regarding alleged intellectual property infringement by the TMC Software?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
2.6.2.4 THE FOREGOING PROVISIONS OF THIS SECTION 2.6.2 STATE THE ENTIRE LIABILITIES AND OBLIGATIONS OF TMC AND THE EXCLUSIVE REMEDIES OF FRANCHISEE WITH RESPECT TO ANY ALLEGED OR ACTUAL INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS BY THE TMC SOFTWARE ASSERTED BY A THIRD-PARTY OR RELATED RIGHTS ARISING OUT OF THIS AGREEMENT.
2.7 Limitation of Liability.
EXCEPT FOR TMC'S OBLIGATION TO INDEMNIFY FRANCHISEE UNDER SECTION 2.6.2, TMC'S TOTAL LIABILITY TO FRANCHISEE ARISING OUT OF THIS AGREEMENT WILL NOT EXCEED THE TOTAL SOFTWARE LICENSE FEES PAID BY FRANCHISEE FOR THE PREVIOUS SIX MONTHS. IN NO EVENT SHALL TMC BE LIABLE FOR COSTS FOR THE PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, LOSS OF PROFITS, LOSS OF BUSINESS, LOSS OF USE, LOSS OF DATA, INTERRUPTION OF BUSINESS, OR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED, AND ANY THEORY OF LIABILITY. THE LIMITS SET FORTH IN THIS SECTION 2.7 WILL APPLY EVEN IF TMC HAS BEEN ADVISED OF, OR HAS ANY CAUSE TO KNOW OF, THE POSSIBILITY OF SUCH LOSS AND NOT WITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to the 2025 Circle K Franchise Disclosure Document, the exclusive remedies available to a franchisee regarding alleged intellectual property infringement by the TMC Software are explicitly defined. TMC's entire liability and the franchisee's exclusive remedies are limited to those outlined in section 2.6.2 of the franchise agreement.
Specifically, if a claim is made or threatened, TMC has the option, at its expense, to (i) secure the right for the franchisee to continue using the TMC Software, (ii) replace the software with non-infringing items that have substantially similar functionality, (iii) modify the software to make it non-infringing, or (iv) refund the software license fees paid by the franchisee for the current term of the agreement. These remedies are the franchisee's sole recourse regarding intellectual property infringement claims related to the TMC Software.
This means that Circle K franchisees are limited to the remedies listed above if they encounter intellectual property infringement issues with the TMC Software. They cannot pursue other legal avenues or claims beyond what is specified in the franchise agreement. This limitation of liability is a standard practice in franchising, where franchisors often seek to control their potential financial exposure. Franchisees should carefully consider these limitations and understand their implications before entering into the franchise agreement.