Does Circle K provide any exceptions to the requirement of signing a secured promissory note?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
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.
- (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)
Based on the 2025 Circle K Franchise Disclosure Document excerpts provided, there is no explicit mention of exceptions to the requirement of signing a secured promissory note. However, Exhibit B to the Incentive and Amortization Agreement outlines a Security Agreement between the DEBTOR and TMC Franchise Corporation, a subsidiary of Circle K Stores, Inc. This agreement defines the 'Obligations' of the DEBTOR, which include indebtedness, liabilities, and obligations arising from the Franchise Agreement, Motor Fuel Agreement, Credit Agreement, and any promissory notes or agreements related to these.
While the excerpts do not detail specific exceptions, the Security Agreement broadly covers obligations arising from various agreements, including potential promissory notes. This suggests that a secured promissory note is a standard part of the financial arrangements within the Circle K franchise system. The agreement also refers to the Uniform Commercial Code of the State, indicating that the security interest is governed by state law.
A prospective Circle K franchisee should directly ask the franchisor about any possible exceptions to the secured promissory note requirement. It would be prudent to inquire under what specific circumstances, if any, Circle K might waive or modify this requirement. Understanding the conditions and terms of the Credit Agreement and related promissory notes is crucial for assessing the financial obligations and risks associated with the franchise.