Under what conditions are the liquidated damages provisions waived for Circle K?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
The provisions of this Section 21 do not apply if the Agreement expires at the end of its initial Term or is terminated due to (i) Purchaser's (or if Purchaser is an entity, Purchaser's principal equity holder's) death; (ii) Purchaser's (or if Purchaser is an entity, Purchaser principal equity holder's) incapacity for at least 90 consecutive days, in either case which event results in Purchaser's (or if Purchaser is an entity, Purchaser's principal equity holder's) inability to personally operate the business hereunder; (iii) condemnation or other taking, in whole or in part, of the Franchised Location due to eminent domain; (iv) destruction of all or a substantial part of the Franchised Location through no fault of Purchaser; or (v) a determination made by Seller in good faith and in the normal course of business to withdraw from marketing in the geographical area
in which the Circle K Business is located. Notwithstanding the foregoing, if a court determines that the payment under this Section 21 is unenforceable, then Seller may pursue all other available remedies, including consequential damages to the extent proved.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the liquidated damages provisions are waived under specific conditions related to the franchisee's circumstances or Circle K's business decisions. These conditions provide some protection to the franchisee in situations where termination is beyond their control or due to a strategic decision by Circle K.
The liquidated damages are waived if the agreement terminates due to the death or incapacity of the purchaser (or the principal equity holder if the purchaser is an entity), provided this prevents them from operating the business. Similarly, if the franchised location is condemned or substantially destroyed through no fault of the purchaser, the liquidated damages do not apply.
Additionally, Circle K will waive the liquidated damages if they make a good faith determination in the normal course of business to withdraw from marketing in the geographical area where the Circle K business is located. However, even if these conditions are met, if a court finds the liquidated damages provision unenforceable, Circle K retains the right to pursue other remedies, including consequential damages.