Does the Circle K franchisee's obligation to indemnify extend to environmental response costs imposed upon the franchisor?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise expressly provided in this Agreement, and without limiting Franchisor's common law rights of indemnification, Franchisee assumes sole and complete responsibility for and will, to the maximum extent permitted by law, defend, protect, indemnify, and hold harmless Franchisor, its Affiliates, and their respective directors, employees, officers, shareholders, managers, members, agents and successors and assigns (individually an "Indemnified Party" and collectively the "Indemnified Parties"), from and against any and all losses, costs, expenses, damages, and liability (including, without limitation, attorneys' fees and court costs) arising out of or relating to this Agreement, Franchisee's negligence, the operation or use of the Franchised Location or the Store, including any Additional Business, including any contracts with third parties related to the operation of the Store, or the equipment or supplies used in connection therewith, and whether arising from bodily injury, personal injury, or property damage, or any other violation of the rights of others, or in any other manner, whether incurred for an Indemnified Party's primary defense or for enforcement of its indemnification rights hereunder, on account of any personal injury, disease, or death of any person(s), damage to or loss of any property, or money damages or specific performance owed to any third party (by contract or operation of law), and any fines, penalties, assessments, environmental response costs, or injunctive obligations imposed upon any of the Indemnified Parties caused by, arising out of, or in any way incidental to, or in connection with, Franchisee's performance hereunder, or the performance, acts, or omissions by any retail customer or consumer served by Franchisee (including employees, agents, contractors, and invitees of Franchisee and Franchisee's resale customers and consumers), or any other person, including any Approved Third-Party Operator.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the franchisee's indemnification obligations do extend to environmental response costs imposed upon the franchisor. Specifically, the franchisee must defend, protect, indemnify, and hold harmless Circle K and its affiliates from any losses, costs, expenses, damages, and liability. This broad obligation includes attorneys' fees and court costs.
The franchisee's responsibility extends to various scenarios related to the operation of the franchised location. This includes any fines, penalties, assessments, environmental response costs, or injunctive obligations imposed upon Circle K. These costs must be caused by, arise out of, or be in any way incidental to the franchisee's performance under the agreement.
This indemnification covers acts or omissions by any retail customer or consumer served by the franchisee, including employees, agents, contractors, and invitees of the franchisee, as well as the franchisee's resale customers and consumers, or any other person, including any Approved Third-Party Operator. This means a Circle K franchisee could be responsible for environmental liabilities stemming from a wide range of activities and parties connected to their store's operation.