Is a Circle K franchisee required to maintain Business Automobile coverage?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
will include the surrounding premises or area, the parking area, and the sidewalks of the Franchised Location. Minimum limits for these coverages will be One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate.
- 13.2 Business Automobile. Franchisee will procure and maintain in full force and effect, at its sole cost and expense, comprehensive automobile liability coverage insuring Franchisee from and against any and all loss, liability, claim or expense resulting from the use, operation or maintenance of any automobile or motor vehicle owned, non-owned
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
Yes, according to Circle K's 2025 Franchise Disclosure Document, franchisees are required to maintain Business Automobile coverage. This coverage must protect the franchisee from any loss, liability, claim, or expense resulting from the use, operation, or maintenance of any vehicle, whether owned, non-owned, or leased, used in connection with the franchised business. This includes vehicles used by the franchisee, their employees, or agents.
The minimum coverage limit for Business Automobile liability is $1,000,000 per occurrence for bodily injury and property damage, including personal injury. In addition to this, Circle K franchisees must also secure and maintain Commercial General Liability coverage with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate, as well as Umbrella or Excess Insurance of at least $1,000,000.
Maintaining adequate insurance coverage is a standard requirement in franchising to protect both the franchisee and the franchisor from potential liabilities. The franchisee is solely responsible for the cost and expense of procuring and maintaining these insurance policies. Failing to maintain the required insurance coverage could result in a breach of the franchise agreement, potentially leading to termination of the agreement.