Is a Circle K franchisee required to submit a certificate evidencing compliant insurance coverage before opening their store?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
If TMC so requires, Licensee shall furnish TMC with certificates of such insurance that provide that coverage will not be canceled or materially changed prior to 30 days' advance written notice to TMC. The insurance required hereunder in no way limits or restricts Licensee's obligations under the law or this Agreement as to indemnification of TMC. If Licensee fails to obtain insurance coverage meeting the minimum requirements outlined above, TMC may, but is not obligated to, obtain insurance coverage on Licensee's behalf and Licensee must reimburse TMC for all costs and expenses it incurred to obtain insurance coverage.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a Circle K licensee must furnish TMC (likely referring to TMC Franchise Corporation) with certificates of insurance if TMC requires it. These certificates must provide that the coverage will not be canceled or materially changed without giving TMC 30 days' advance written notice. This requirement ensures that Circle K is protected by the licensee's insurance policies and receives ample warning if coverage is altered or terminated.
The insurance policies obtained by the licensee must name TMC as an additional insured and be primary relative to any other existing, valid, and collectible insurance. The policies must also contain provisions releasing all rights of subrogation against TMC. This means that Circle K's protection under the franchisee's insurance is prioritized, and the insurance company cannot seek to recover costs from Circle K for any claims paid out.
The insurance requirements outlined are minimums and might not adequately cover all of the licensee's insurance needs. TMC retains the right to mandate additional types and amounts of insurance coverage, including modifications to existing requirements. If a licensee fails to secure insurance coverage that meets the minimum requirements, TMC has the option, but not the obligation, to obtain insurance on the licensee's behalf, with the licensee responsible for reimbursing TMC for all associated costs and expenses.