Regarding the Circle K franchise agreement, can a franchisee rely on representations made in the Franchise Disclosure Document, even though the statements in the Franchise Disclosure Document do not become part of the Franchise Agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
mencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including, fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with this franchise.
ADDENDUM TO FRANCHISE AGREEMENT FOR THE STATE OF ILLINOIS
This Addendum will pertain to franchises sold in the state of Illinois and will be for the purpose of complying with Illinois statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement will be amended to include the following:
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- Article 20.5 is hereby deleted in its entirety and the following is substituted in its place:
- 20.5 Governing Law. Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. § 1051 et seq.), and the Federal Arbitration Act (9 U.S.C. § 1, et seq.), or matters arising under the Illinois Franchise Disclosure Act which shall be governed thereby, this Agreement and the relationship between the Franchisor and Franchisee will be governed by the laws of the state of Arizona.
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Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to the 2025 Circle K Franchise Disclosure Document, franchisees in Illinois can rely on the representations made in the Franchise Disclosure Document (FDD), even though the statements in the FDD do not become part of the Franchise Agreement. An addendum to the franchise agreement for Illinois states that Article 20.11 should not be construed to mean that a franchisee cannot rely on the representations in the FDD that Circle K provided in connection with the offer and purchase of the license. However, the addendum also clarifies that while franchisees can rely on the FDD, nothing within the FDD can contradict or be inconsistent with the terms outlined in the franchise agreement itself.
This provision is particularly important for prospective Circle K franchisees in Illinois as it offers a degree of protection regarding the information presented during the franchise sales process. It ensures that franchisees are not prevented from claiming reliance on the FDD, especially in matters of potential misrepresentation or fraud. This protection is further reinforced by the statement that no signed document can disclaim reliance on statements made by Circle K or its representatives.
However, franchisees should be aware that the franchise agreement takes precedence over the FDD in case of any inconsistencies. Therefore, it is crucial for franchisees to thoroughly review and understand the franchise agreement before signing. This includes seeking legal counsel to clarify any ambiguities or discrepancies between the FDD and the agreement. While the FDD provides valuable information, the actual contractual obligations and rights are defined by the franchise agreement.
For franchisees outside of Illinois, the FDD includes a similar provision in an addendum applicable to franchisees in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. This addendum states that no signed document can disclaim reliance on statements made by Circle K or its representatives. This suggests that Circle K aims to provide similar protections to franchisees in these states, ensuring they can rely on the information presented during the franchise sales process, subject to the specific terms and conditions outlined in their franchise agreements.