What state's laws govern the Circle K franchise agreement and the relationship between the licensee and TMC?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
According to Circle K's 2025 Franchise Disclosure Document, the Security Agreement included as Exhibit B to the Incentive and Amortization Agreement specifies that the term "State" refers to the State of «State_2». Additionally, the agreement stipulates that all terms defined in the Uniform Commercial Code of that state will have the same definitions as specified therein. If a term is defined differently in Article 9 of the Uniform Commercial Code of the State than in another Article, the definition in Article 9 prevails.
This means that the laws of the specific state where the Circle K store is located, as defined by «State_2», govern the Security Agreement. This is particularly relevant for interpreting the terms within the agreement according to the state's Uniform Commercial Code.
For a prospective Circle K franchisee, this highlights the importance of understanding the legal and commercial codes of the state in which their franchise will operate, as these laws will directly impact the interpretation and enforcement of the Security Agreement. Franchisees should consult with legal counsel in their state to ensure they fully understand their rights and obligations under the agreement.