Under what circumstances must a Circle K franchisee indemnify TMC, its affiliates, and their representatives against claims?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall indemnify and hold harmless, and at TMC's request, defend, TMC, its affiliates and their respective officers, directors, employees, agents and representatives and successors and assigns from and against any and all claims, damages, liabilities, expenses (including reasonable attorney's fees and costs of litigation), losses, judgments, assessments of any kind whatsoever (collectively "Claims") arising out of (a) Franchisee's breach of this Agreement and (b) subject to Franchisor's obligations under Section 2.6.2 below, any and all Claims by any third parties arising out of or in any way related to Franchisee's use of the Equipment, TMC Software or Third-Party Software hereunder. TMC shall give Franchisee appropriate notice of any such Claims of which TMC becomes aware.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a franchisee is required to indemnify TMC Franchise Corporation, its affiliates, and their representatives under specific circumstances. The franchisee must protect TMC from any claims, damages, liabilities, expenses, losses, judgments, and assessments that arise from two primary situations.
First, the franchisee is responsible for indemnification if they breach the Franchise Agreement. This means that if the franchisee violates any terms or conditions outlined in the agreement, they are liable for any resulting claims against TMC. Second, the franchisee must indemnify TMC against claims by third parties related to the franchisee's use of the Equipment, TMC Software, or Third-Party Software provided under the agreement. However, this is subject to TMC's obligations as outlined in another section (2.6.2) of the agreement, which likely details TMC's own responsibilities in certain situations.
It's important to note that TMC is required to provide the franchisee with appropriate notice of any such claims that TMC becomes aware of. This notification is crucial, as it allows the franchisee to take necessary steps to address the issue and potentially mitigate damages. This indemnification clause is a standard component of franchise agreements, designed to protect the franchisor from liabilities arising from the franchisee's operations and actions. A prospective franchisee should carefully review the entire Section 2.6 within the franchise agreement to fully understand the scope of their indemnification obligations and TMC's corresponding responsibilities.