What are the obligations of a Circle K franchisee who signs a secured promissory note?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
agree that this Note and the Loan Documents are a product of their joint effort. As a result, any rules of construction, including but not limited to Civil Code section 1654 and the rule that a contract should be construed against the drafter, shall not apply.
| Average Gross Sales (last 12 months) | Maximum Amount Available | |
|---|---|---|
| $50,000 or less | Up to 0.5 times Gross Sales | |
| $50,001 to $75,000 | Up to 0.6 times Gross Sales | |
| $75,001 to $100,000 | Up to 0.7 times Gross Sales | |
| $100,000+ | Up to 0.75 times Gross Sales | #### Exhibit B to Incentive and Amortization Agreement |
SECURITY AGREEMENT
______________________ (the "DEBTOR") and TMC Franchise Corporation, a wholly owned subsidiary of Circle K Stores, Inc., an Arizona corporation, and any affiliated or related companies ("TMC FRANCHISE CORPORATION") agree as follows:
- 1. Definitions. All capitalized terms used herein without definitions shall have the respective meanings provided therefor in the Franchise Agreement, Motor Fuel Agreement or Credit Agreement. In addition:
- (a) The term "State," as used herein, means the State of «State_2».
- (b) All terms defined in the Uniform Commercial Code of the State and used herein shall have the same definitions herein as specified therein. However, if a term is defined in Article 9 of the Uniform Commercial Code of the State differently than in another Article of the Uniform Commercial Code of the State, the term has the meaning specified in Article 9.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to the 2025 Circle K Franchise Disclosure Document, the obligations of a franchisee who signs a secured promissory note to TMC Franchise Corporation are defined within a Security Agreement. This agreement is an exhibit to the Incentive and Amortization Agreement.
The Security Agreement states that the franchisee, as the "DEBTOR", agrees to certain terms with TMC Franchise Corporation, a subsidiary of Circle K Stores, Inc. The term "Obligations" in the agreement encompasses all debts, obligations, and liabilities the franchisee owes to TMC Franchise Corporation. These obligations can be direct or indirect, joint or several, absolute or contingent, and can arise at any time.
Specifically, these obligations include those arising from the Circle K Franchise Agreement, any Motor Fuel Agreement, any Credit Agreement (covering funding or credit extended by TMC Franchise Corporation), and any promissory notes or related agreements. The agreement references the Uniform Commercial Code of the State, defining terms used within the agreement. Therefore, a Circle K franchisee needs to understand all these referenced agreements and the UCC to fully grasp their obligations under the secured promissory note.