Under the Circle K agreement, can a third party claim beneficiary rights?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) No Third-Party Beneficiary. Nothing contained in this Agreement shall be deemed, interpreted, or construed to create, or express any intent to create, third party beneficiary rights in favor of any person or entity, except for any indemnified party (or other person entitled to be indemnified pursuant to this Agreement), and TMC and Licensee specifically state and agree that no such intent exists.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the franchise agreement generally does not create third-party beneficiary rights. Specifically, the agreement states that it is not intended to create such rights for any person or entity. However, there is an exception for any indemnified party or other person entitled to indemnification under the agreement.
This means that, in most cases, someone who is not a direct party to the Circle K franchise agreement (i.e., not the franchisee or Circle K itself) cannot claim rights or benefits under the agreement. This is a common provision in franchise agreements, as it limits the potential for outside parties to make claims against the franchisor or franchisee based on the agreement's terms.
The exception for indemnified parties is important. If a third party is entitled to indemnification under the agreement, they may have certain rights as a beneficiary. Indemnification typically relates to protection against losses or damages. A prospective Circle K franchisee should carefully review the sections of the franchise agreement that discuss indemnification to understand when a third party might have beneficiary rights. This includes understanding who qualifies as an indemnified party and under what circumstances indemnification would be provided.