What options for recourse are available to Circle K in addition to arbitration, as outlined in the franchise agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.3 Exception to Arbitration. Notwithstanding Section 18.2, the parties agree that the following claims will not be subject to arbitration:
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- any action for declaratory or equitable relief, including, without limitation, seeking preliminary or permanent injunctive relief, specific performance, other relief in the nature of equity to enjoin any harm or threat of harm to such party's tangible or intangible property, brought at any time, including, without limitation, prior to or during the pendency of any arbitration proceedings initiated hereunder.
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- any action in ejectment or for possession of any interest in real or personal property.
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- any action for the collection of moneys owed to Franchisor or its affiliates; and
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- any action related to the obligations of Franchisee upon termination or expiration of this Agreement, including, without limitation related to covenants not to compete and confidentiality obligations.
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- 18.4 Injunctive Relief. Franchisor will be entitled to seek the entry of temporary and permanent injunctions and orders of specific performance enforcing the provisions of this Agreement relating to: (A) the Marks and the Business System; (B) the obligations of Franchisee upon termination or expiration of this Agreement; (C) the assignment of this Agreement, the Franchised Business, and ownership interests in Franchisee; (D) the covenants not to compete; (E) confidentiality; or (F) any act or omission by Franchisee, the Store or employees of the Store that (i) constitutes a violation of any applicable law, ordinance or regulation, (ii) is dishonest or misleading to customers or prospective customers of the Store or other Circle K Stores, (iii) constitutes a danger to employees or customers of the Store or to the public, or (iv) may impair the goodwill associated with the Marks and the Business System.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, there are specific exceptions to the arbitration clause in the franchise agreement, allowing Circle K to pursue other legal avenues in certain situations. These exceptions provide Circle K with the ability to seek immediate action through the courts to protect its interests.
Specifically, Circle K is not required to engage in arbitration for actions involving declaratory or equitable relief. This includes seeking preliminary or permanent injunctive relief or specific performance to prevent harm to Circle K's tangible or intangible property. Circle K can also pursue actions in ejectment or for possession of real or personal property without going through arbitration. Additionally, any action for the collection of monies owed to Circle K or its affiliates, and any action related to the franchisee's obligations upon termination or expiration of the agreement, including non-compete and confidentiality obligations, are also exempt from arbitration.
Furthermore, Circle K retains the right to seek temporary and permanent injunctions and orders of specific performance to enforce provisions related to the Marks and Business System, franchisee obligations upon termination or expiration, assignment of the agreement, covenants not to compete, confidentiality, and any franchisee actions that violate laws, are dishonest, endanger others, or impair the goodwill associated with the Marks and Business System. This ensures Circle K can act swiftly to address critical issues affecting its brand and operations.