Does Circle K specify any prohibited actions related to the secured promissory note?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
lowing Collateral:
- 4.1. Collateral in the Possession of a Bailee. If any Goods are at any time in the possession of a bailee, DEBTOR shall promptly notify TMC FRANCHISE CORPORATION thereof and, if requested by TMC FRANCHISE CORPORATION, shall promptly obtain an acknowledgement from the bailee, in form and substance satisfactory to TMC FRANCHISE CORPORATION, that the bailee holds such Collateral for the benefit of TMC FRANCHISE CORPORATION and shall act upon the instructions of TMC FRANCHISE CORPORATION, without the further consent of DEBTOR. TMC FRANCHISE CORPORATION agrees with DEBTOR that TMC FRANCHISE CORPORATION shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by DEBTOR with respect to the bailee.
- 4.2. Other Actions as to any and all Collateral. DEBTOR further agrees to take any other action reasonably requested by TMC FRANCHISE CORPORATION to insure the attachment, perfection and first priority of, and the ability of TMC FRANCHISE CORPORATION to enforce, TMC FRANCHISE CORPORATION's security interest in any and all of the Collateral including, without limitation, (a) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the Uniform Commercial Code, to the extent, if any, that DEBTOR's signature thereon is required therefor, (b) causing TMC FRANCHISE CORPORATION's name to be noted as secured party on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of TMC FRANCHISE CORPORATION to enforce, TMC FRANCHISE CORPORATION's security interest in such Collateral, (c) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of TMC FRANCHISE CORPORATION to enforce, TMC FRANCHISE CORPORATION's security interest in such Collateral, (d) obtaining governmental and other third party consents and approvals, including without limitation any consent of any licensor, lessor or other person obligated on Collateral, (e) obtaining waivers from mortgagees and landlords in form and substance satisfactory to TMC FRANCHISE CORPORATION and (f) taking all actions required by any earlier versions of the Uniform Commercial Code or by other law, as applicable in any relevant Uniform Commercial Code jurisdiction, or by other law as applicable in any foreign jurisdiction.
- 5. Relation to Other Security Documents. The provisions of this Agreement supplement the provisions of any real estate mortgage or deed of trust granted by DEBTOR to TMC FRANCHISE CORPORATION and securing the payment or performance of any of the Obligations. Nothing contained in any such real estate mortgage or deed of trust shall derogate from any of the rights or remedies of TMC FRANCHISE CORPORATION hereunder.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
The 2025 Circle K Franchise Disclosure Document outlines several actions related to the secured promissory note and security agreement. Specifically, the document details actions the franchisee (referred to as DEBTOR) must take to ensure Circle K's (TMC FRANCHISE CORPORATION's) security interest in the collateral is protected. These actions include executing and filing financing statements, noting Circle K as the secured party on certificates of title, and complying with statutes related to the collateral.
Additionally, the Circle K FDD states that the franchisee must obtain necessary governmental and third-party consents, including those from licensors, lessors, or others obligated on the collateral. They must also obtain waivers from mortgagees and landlords in a form satisfactory to Circle K. These stipulations ensure Circle K maintains a first-priority security interest in the collateral.
Furthermore, Circle K states that TMC FRANCHISE CORPORATION will not instruct a bailee unless an Event of Default has occurred or would occur after DEBTOR's action. The document also clarifies that the security agreement supplements any real estate mortgage or deed of trust granted by the franchisee to Circle K, reinforcing Circle K's rights and remedies.
In the event of a default, the secured promissory note states that the entire unpaid principal balance, along with all unpaid interest, will immediately become due and payable at Circle K's option. The interest rate on the outstanding balance after default will automatically increase to 18% per annum, compounded monthly, or the highest rate permitted by law. The franchisee is also responsible for covering all expenses incurred by Circle K in any attempt to collect amounts due or enforce the provisions of the note, including attorney's fees, recording fees, and filing fees.