Is the secured promissory note a mandatory requirement for all Circle K franchisees?
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)
Based on the 2025 Circle K Franchise Disclosure Document, whether a secured promissory note is a mandatory requirement for all franchisees is not explicitly stated. However, the Security Agreement included as Exhibit B to the Incentive and Amortization Agreement indicates that under certain circumstances, a franchisee (referred to as "DEBTOR") may enter into agreements where TMC Franchise Corporation extends funding or credit. These agreements may involve promissory notes or other instruments.
The document defines "Obligations" as all debts, liabilities, and responsibilities of the franchisee to TMC Franchise Corporation, including those arising from the Franchise Agreement, Motor Fuel Agreement, or any Credit Agreement. This Credit Agreement specifically refers to agreements where TMC Franchise Corporation provides funding or credit to the franchisee and may involve promissory notes. The Security Agreement itself serves to secure these obligations.
While the FDD excerpts do not confirm that every Circle K franchisee is required to sign a secured promissory note, they do suggest that it is a possible requirement if the franchisee receives funding or credit from TMC Franchise Corporation. A prospective franchisee should inquire with Circle K about the specific circumstances under which a secured promissory note is required and what the terms of such a note would entail.