Under the Circle K Security Agreement, what agreements are included in the definition of 'Obligations'?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) The term "Obligations," as used herein, means all of the indebtedness, obligations and liabilities of DEBTOR to TMC FRANCHISE CORPORATION, individually or collectively, whether direct or indirect, joint or several, absolute or contingent, due or to become due, now existing or hereafter arising in any manner or at any time, including those arising under or in respect of the Circle K Franchise Agreement entered into between TMC FRANCHISE CORPORATION and DEBTOR (the "Franchise Agreement"), Motor Fuel Agreement entered into between TMC FRANCHISE CORPORATION and DEBTOR], any agreement or agreements by which TMC FRANCHISE CORPORATION extends any funding or credit to DEBTOR, no matter how such agreement is denominated (the "Credit Agreement"), any promissory notes or other instruments or agreements executed and delivered pursuant thereto or in connection therewith or this Agreement.
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 defines 'Obligations' broadly. This definition encompasses all forms of debt, liabilities, and responsibilities that a franchisee (referred to as 'DEBTOR') owes to TMC Franchise Corporation. These obligations can be direct or indirect, individual or shared, absolute or conditional, and can arise at any time.
Specifically, the 'Obligations' include debts and liabilities arising from several key agreements. These are the Circle K Franchise Agreement itself, the Motor Fuel Agreement between TMC Franchise Corporation and the franchisee, and any Credit Agreement under which TMC Franchise Corporation provides funding or credit to the franchisee. The definition also extends to any promissory notes, instruments, or agreements related to these core agreements or to the Security Agreement itself.
For a prospective Circle K franchisee, this means that the Security Agreement acts as a safety net for Circle K, securing all potential financial responsibilities the franchisee may incur. It is important for franchisees to understand the full scope of these 'Obligations' as they relate to all agreements with Circle K, as these are secured by the collateral defined in the Security Agreement. Franchisees should carefully review all referenced agreements to fully understand their financial responsibilities and the implications of the Security Agreement.