Which state's laws govern the Circle K agreement?

According to Circle K's 2025 Franchise Disclosure Document, the franchise agreement is generally governed by the laws of Arizona. However, an addendum to the franchise agreement specifies that for franchises sold in North Dakota, the agreement will be governed by North Dakota law, notwithstanding any contradictory statements in the main document. This ensures compliance with Section 51-19-09 of the North Dakota Franchise Investment Law, which the Commissioner has interpreted to mean that franchise agreements specifying governance by laws outside of North Dakota are considered unfair or inequitable. The only exceptions to this are matters governed by the United States Trademark Act of 1946 (Lanham Act) and the Federal Arbitration Act.

For prospective Circle K franchisees, this means that the governing law of their franchise agreement depends on the state in which the franchise is located. In most states, the agreement will be subject to Arizona law. However, if the franchise is in North Dakota, North Dakota law will prevail, except for specific federal laws related to trademarks and arbitration. This is particularly important for understanding legal rights, obligations, and dispute resolution processes under the franchise agreement.

This stipulation highlights the importance of carefully reviewing any state-specific addenda to the franchise agreement. Franchisees in North Dakota should be aware that certain provisions of the standard Circle K franchise agreement may not apply to them and that North Dakota law will govern their franchise relationship. This could affect various aspects of the franchise, including dispute resolution, termination rights, and enforcement of covenants. Franchisees should consult with legal counsel to fully understand the implications of the governing law in their specific state.