For Circle K franchisees/licensees, are personal guarantors required to guarantee individually?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of the execution of the Agreements by Franchisor, and for other good and valuable consideration, the undersigned, for themselves, their heirs, successors, and assigns, do jointly, individually and severally hereby become surety and guarantor, absolutely and unconditionally, for the prompt payment of all amounts and performance of all covenants, terms and conditions in the Agreements, to be paid, kept and performed by Debtor and/or its Affiliates (collectively, "Franchisee"), including without limitation the arbitration and other dispute resolution provisions of the Agreements.
Further, the undersigned, individually and jointly, hereby agree to be personally bound by each and every condition and term contained in the Agreements and agree that this Personal Guaranty will be construed as though the undersigned and each of them executed the Agreements containing the identical terms and conditions of the Agreements.
The undersigned each waives: (1) notice of demand and presentment for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (2) protest and notice of default to any party respecting the indebtedness or nonperformance of any obligations hereby guaranteed; and (3) any right he/she may have to require that an action be brought against the Franchisee, or any other person as a condition of liability.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, personal guarantors are required to guarantee individually. Specifically, if the franchisee is a corporation, limited partnership (where the general partner is a corporation), or a limited liability company, each Principal Equity Holder must execute a Personal Guaranty. This guaranty ensures that each Principal Equity Holder personally guarantees the franchisee's payment and performance obligations under the Franchise Agreement, any related agreements with Circle K, or any agreements executed upon renewal.
The Personal Guaranty included as Exhibit J in the FDD states that the guarantors become jointly, individually, and severally liable for the franchisee's obligations. This means that each guarantor is independently responsible for the full amount of the debt and performance of all obligations. Circle K can pursue any one or all of the guarantors for the full amount owed, regardless of the contributions or involvement of the other guarantors.
Furthermore, the guarantors waive certain rights, including the right to receive notice of demand for payment or notice of default. They also waive the right to require Circle K to first bring an action against the franchisee before pursuing the guarantors. This underscores the comprehensive and unconditional nature of the personal guaranty required by Circle K, placing significant financial responsibility on the individual guarantors.