Under the Circle K Security Agreement, who are the parties to the Security Agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
agree that this Note and the Loan Documents are a product of their joint effort. As a result, any rules of construction, including but not limited to Civil Code section 1654 and the rule that a contract should be construed against the drafter, shall not apply.
| Average Gross Sales (last 12 months) | Maximum Amount Available | |
|---|---|---|
| $50,000 or less | Up to 0.5 times Gross Sales | |
| $50,001 to $75,000 | Up to 0.6 times Gross Sales | |
| $75,001 to $100,000 | Up to 0.7 times Gross Sales | |
| $100,000+ | Up to 0.75 times Gross Sales | #### 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 parties to the Security Agreement are the DEBTOR and TMC Franchise Corporation, a wholly-owned subsidiary of Circle K Stores, Inc., along with any affiliated or related companies. The DEBTOR is not explicitly defined in the excerpt but is understood to be the franchisee. TMC Franchise Corporation enters the agreement as the secured party to whom the DEBTOR owes obligations.
This agreement establishes a legal framework where the franchisee (DEBTOR) provides a security interest in certain assets to TMC Franchise Corporation. This security interest ensures that TMC Franchise Corporation has a claim on those assets if the franchisee fails to meet its financial obligations. These obligations encompass all debts, liabilities, and responsibilities the franchisee owes to TMC Franchise Corporation, whether direct or indirect, current or future, and include obligations arising from the Franchise Agreement, Motor Fuel Agreement, or Credit Agreement.
The Security Agreement is closely tied to other agreements such as the Franchise Agreement, Motor Fuel Agreement, and Credit Agreement, indicating that the financial stability and adherence to the terms of these agreements are crucial for the franchisee. The agreement also references the Uniform Commercial Code, which governs secured transactions, ensuring that the agreement is legally sound and enforceable under state law. Prospective franchisees should carefully review all related agreements to fully understand their financial obligations and the implications of the Security Agreement.
In essence, the Security Agreement is a protective measure for TMC Franchise Corporation, ensuring they have recourse in case of franchisee default. For a prospective Circle K franchisee, this means understanding the full scope of their financial commitments and the assets that could be at risk under the Security Agreement. It is advisable to seek legal counsel to fully comprehend the implications before entering into the agreement.