Does the existence or nonexistence of required insurance limit a Circle K licensee's indemnification obligations under the Franchise Agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee shall indemnify, protect, defend, and save TMC harmless from and against any and all losses, claims, liabilities, environmental cleanup costs, fines, penalties, suits and actions, judgments and costs, including attorneys' fees and the costs of litigation, which shall arise from, or grow out of, any injury to or death of persons, or damage to or loss of property, or violation by Licensee or any other person of any governmental statute, law, regulation, rule, or ordinance, directly or indirectly resulting from, or in any way connected with (i) Licensee's performance of this Agreement, (ii) operation of Licensee, or activities of any other person, at the Premises, or (iii) the condition of the Premises and the adjoining streets, sidewalks or ways, irrespective of whether such injury, death, damage or loss is sustained by Licensee or any other person, firm or corporation which may seek to hold TMC liable. The existence or nonexistence of any insurance required under this Agreement will not limit Licensee's indemnity or other obligations under this Agreement. This indemnity shall survive the termination or nonrenewal of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the existence or nonexistence of any insurance required under the agreement does not limit the licensee's indemnity or other obligations under the agreement. This means that regardless of whether the franchisee has the required insurance coverage, their responsibility to indemnify TMC Franchise Corporation (TMC) remains in full effect. This obligation extends to losses, claims, liabilities, environmental cleanup costs, fines, penalties, suits, actions, judgments, and costs, including attorney's fees and litigation expenses.
This indemnification obligation arises from any injury to or death of persons, damage to or loss of property, or violation of any governmental statute, law, regulation, rule, or ordinance. These events must directly or indirectly result from or be connected with the licensee's performance of the agreement, the operation of the licensee's business, the activities of any person at the premises, or the condition of the premises and adjoining areas. The indemnification applies irrespective of who sustains the injury, death, damage, or loss, and it covers situations where TMC may be held liable.
For a prospective Circle K franchisee, this clause signifies a substantial financial responsibility. Even if the franchisee carries the required insurance, they are still personally liable for a wide range of potential issues. This liability extends beyond the term of the agreement, as the indemnity survives termination or nonrenewal. Franchisees should carefully assess their risk tolerance and financial capacity to handle potential indemnification claims, as these could be significant and are not limited by insurance coverage.