What is included in the definition of 'Obligations' under the Circle K Security Agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) The term "Obligations," as used herein, means all of the indebtedness, obligations and liabilities of DEBTOR to TMC FRANCHISE CORPORATION, individually or collectively, whether direct or indirect, joint or several, absolute or contingent, due or to become due, now existing or hereafter arising in any manner or at any time, including those arising under or in respect of the Circle K Franchise Agreement entered into between TMC FRANCHISE CORPORATION and DEBTOR (the "Franchise Agreement"), Motor Fuel Agreement entered into between TMC FRANCHISE CORPORATION and DEBTOR], any agreement or agreements by which TMC FRANCHISE CORPORATION extends any funding or credit to DEBTOR, no matter how such agreement is denominated (the "Credit Agreement"), any promissory notes or other instruments or agreements executed and delivered pursuant thereto or in connection therewith or this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the term "Obligations" in the Security Agreement is broadly defined. It encompasses all forms of debt, liabilities, and responsibilities that the franchisee (DEBTOR) owes to TMC Franchise Corporation. These obligations can be direct or indirect, individual or shared, absolute or conditional, and can be currently due or due in the future.
Specifically, the definition includes obligations arising from several key agreements. This includes the Circle K Franchise Agreement, the Motor Fuel Agreement, and any Credit Agreement under which TMC Franchise Corporation provides funding or credit to the franchisee. It also covers any promissory notes or other financial instruments related to these agreements.
For a prospective Circle K franchisee, this means that the Security Agreement is designed to secure a wide range of potential financial liabilities to TMC Franchise Corporation. Understanding the full scope of these "Obligations" is crucial, as it determines the assets that could be at risk under the Security Agreement. Franchisees should carefully review all related agreements to fully grasp the extent of their potential liabilities.