If mediation fails, is arbitration binding for disputes between TMC and a Circle K licensee?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
If not resolved by mediation and except as qualified below, any dispute between TMC and Licensee or their respective affiliates arising under, out of, in connection with or in relation to this Agreement or the parties' relationship must be submitted to binding arbitration under the authority of the Federal Arbitration Act and in accordance with the Center for Public Resources Rules Non-Administered Arbitration of Business Disputes then in effect.
Any arbitration must be on an individual basis and the parties and the arbitrator will have no authority or power to proceed with any claim as a class action or otherwise to join or consolidate any claim with any other claim or any other proceeding involving third parties.
In the event a court determines that this limitation on joinder of or class action certification of claims is unenforceable, then this entire commitment to arbitrate will become null and void and the parties must submit all claims to the jurisdiction of the courts.
The arbitration must take place in Maricopa County, Arizona (or the county in which TMC's headquarters are located at the time arbitration is demanded).
The arbitrator must follow the law and not disregard the terms of this Agreement.
The arbitrator must have at least 5 years of significant experience in franchise law.
A judgment may be entered upon the arbitration award by any state or federal court in the state where Franchisor maintains its headquarters or the state where the Premises are located.
The decision of the arbitrator will be final and binding on all parties to the dispute; however, the arbitrator may not under any circumstances: (1) stay the effectiveness of any pending termination of this Agreement; or (2) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that TMC sets.
All applicable statutes of limitations will be tolled while the procedures specified in this Section 12(b) are pending.
The parties will take such action, if any, required to effectuate such tolling.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, if mediation does not resolve a dispute between TMC Franchise Corporation and a licensee, the dispute must be submitted to binding arbitration, with certain qualifications. This arbitration is conducted under the Federal Arbitration Act and follows the Center for Public Resources Rules for Non-Administered Arbitration of Business Disputes. The arbitration must occur in Maricopa County, Arizona, or the county where TMC's headquarters are located when arbitration is demanded.
This agreement mandates that any arbitration proceed on an individual basis, explicitly prohibiting class action claims or the consolidation of claims with other parties. Should a court deem this restriction unenforceable, the entire arbitration agreement becomes void, and all claims must be submitted to the courts. The arbitrator is required to adhere to the law and the terms of the Circle K Branding Agreement, possessing at least five years of experience in franchise law.
The arbitrator's decision is final and binding, but with specific limitations: the arbitrator cannot halt a pending termination of the agreement or alter any lawful term or business performance standard set by TMC. A judgment on the arbitration award can be entered in any state or federal court where Circle K maintains its headquarters or where the premises are located. Statutes of limitations are tolled during the arbitration process, ensuring that parties do not lose their right to bring a claim due to the time spent in arbitration.