Regarding credit card invoices purchased by TMC, what representations and warranties does a Circle K purchaser make?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Purchaser will pay to TMC or its designee a processing fee and/or per-transaction fee, in the amount and in the manner established by TMC or its designee from time to time. The current amounts of the processing fees and per-transaction fees are set forth in the Franchise Disclosure Document delivered to Purchaser in connection with entering into the Underlying Agreement. TMC reserves the right to change the fee amounts upon 30 days' prior written notice. TMC reserves the right to deduct any processing fees and per-transaction fees from the credit card sales invoice amounts purchased by TMC hereunder. TMC also reserves the right to replace the TMC Network with a substitute network and charge fees for Purchaser's access to and use of such substitute network. Any such substitute network will be considered TMC Network for purposes of this Agreement.
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- Purchaser's Representations, Warranties and Covenants. With respect to each credit card invoice purchased by TMC or its designee hereunder, Purchaser represents and warrants that Purchaser has no knowledge that (a) the signature on the credit card sales invoice is unauthorized, (b) the credit card used by the cardholder is not genuine, (c) the credit card sales invoice was altered subsequent to its signature, (d) any portions of the credit card sales invoice completed by Purchaser, its employees or agents were completed fraudulently or incorrectly, (e) the credit card used by the cardholder was unauthorized or canceled, (f) the credit card used by the cardholder or the credit card user was not authorized, or (g) the credit card was used by the cardholder at a business other than the Premises. Purchaser agrees to keep secure and protect from disclosure all card transaction data in accordance with then-current data security and privacy legal requirements, data security and privacy requirements of TMC and the terms of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a Circle K purchaser makes several representations and warranties regarding credit card invoices purchased by TMC or its designee. The purchaser warrants they have no knowledge of the following: the signature on the credit card sales invoice is unauthorized, the credit card used by the cardholder is not genuine, the credit card sales invoice was altered after being signed, any part of the invoice completed by the purchaser or their staff was done fraudulently or incorrectly, the credit card used was unauthorized or canceled, the cardholder or user wasn't authorized to use the card, or the card was used at a business other than the Circle K premises.
These warranties are crucial because TMC purchases the credit card sales invoices from the Circle K franchisee. If any of these representations are false, the franchisee is obligated to repurchase the invoice from TMC. This protects TMC from potential fraud or losses associated with invalid credit card transactions.
Furthermore, the Circle K franchisee must keep all card transaction data secure and protected from disclosure, adhering to current data security and privacy laws, TMC's requirements, and the terms of the Credit Network Agreement. Failure to comply with these security measures could lead to liabilities for the franchisee. This requirement highlights the importance of data protection and compliance in the Circle K franchise system.