FDD Items 3 & 4 · 2024 filing
Circle K litigation history
What Circle K disclosed about lawsuits, arbitrations and bankruptcy in the 2024 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 (litigation) & 4 (bankruptcy) at a glance
What the filing discloses
- Cases disclosed
- 4
- Item 3, as counted in the filing
- Largest settlement, franchisor's own cases
- $180K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2024
- Disclosures cover the prior ten years
Extracted from the 2024 Franchise Disclosure Document
Item 3: litigation
TMC as plaintiff: 2 cases (v. Broadway Restaurants re post-termination obligations, settled $30,722 paid to TMC; v. Golen et al. re liquidated damages, settled with payment to TMC). TMC as defendant/cross-defendant: Universal Property Services v. Lehigh Gas et al. added TMC as defendant re misrepresentations in sale of 17 stores, settled 7/2024 with TMC paying $180,000. FTC order involving affiliate ACT and CrossAmerica re divestiture timing, $3.5M civil penalty paid.
Item 3 (litigation) · 4 matters disclosed
Litigation cases
The franchisor
Concluded (3)
TMC Franchise Corporation v. Broadway Restaurants, Inc., Zuri Barnes
settledBrought against a franchisee · filed 2021-05-25 · Los Angeles County Sup. Ct. · 21STCV 19544
“… Case No. 21STCV 19544 (Los Angeles County Sup. Ct.). On September 13, 2019, TMC terminated for cause the Circle K franchise agreement with Broadway Restaurants, Inc. (“BRI”), after BRI failed to cure its defaults under the franchise agreement, following several opportunities to cure provided by TMC.”Page 17 of the 2024 FDD, Item 3
Outcome: “The parties settled the dispute on December 29, 2022, pursuant to which settlement Defendant paid TMC $30,722, and the parties entered into mutual releases of liability and filed a stipulation of dismissal, with prejudice, of the lawsuit.”
Universal Property Services, Inc., et al. v. Lehigh Gas Wholesale Services, Inc., et al.
settledBrought by a franchisee · filed 2020-03-26 · U.S. District Court for New Jersey (D. N.J.) · 3:20-CV-03315-FLW-TJB
“… Case No. 3:20-CV- 03315-FLW-TJB (D. N.J.). A former franchisee and its guarantor (“Plaintiffs”) filed a lawsuit in the U.S. District Court for New Jersey on March 26, 2020, against Lehigh Gas Wholesale Services, Inc., Lehigh Gas Wholesale LLC, and LGP Realty Holdings LP (together, “Lehigh Defendants”).”Page 17 of the 2024 FDD, Item 3
Outcome: “The parties settled the dispute on July 2, 2024 pursuant to which settlement TMC and Circle K Stores, without admitting any fault or liability, collectively paid Plaintiffs $180,000, and the parties entered into mutual releases of liability and filed a stipulation of dismissal, with prejudice, of the lawsuit.” (page 18)
TMC Franchise Corporation et al. v. Golen, et al.
settledBrought against a franchisee · filed 2019-10-16 · U.S. District Court for the Middle District of Florida (M.D. Fla.) · 6:19-CV-1970
“… Case No. 6:19-CV-1970 (M.D. Fla.). TMC Franchise Corporation (“TMC”) and its parent company Circle K Stores, Inc. (“Circle K Stores”) filed a lawsuit in the U.S. District Court for the Middle District of Florida on October 16, 2019, against its former franchisee Ishan Interprices, Inc.”Page 18 of the 2024 FDD, Item 3
Outcome: “The parties resolved the lawsuit through a settlement agreement effective April 27, 2020, which included mutual releases of claims and payment of certain amounts to TMC and Circle K Stores.”
Parent, affiliates, master franchisor and subfranchisor
Concluded (1)
In the Matter of Alimentation Couche-Tard Inc., a corporation, and CrossAmerica Partners LP, a limited partnership (FTC Decision and Order and Order to Maintain Assets)
judgmentGovernment or regulatory action · Alimentation Couche-Tard Inc. and CrossAmerica Partners LP · filed 2017-11-29 · United States Federal Trade Commission · Docket No. C - 4635, FTC file number 171-0184
“Decision and Order and Order to Maintain Assets of the United States Federal Trade Commission (“FTC”) in the Matter of Alimentation Couche-Tard Inc., a corporation, and CrossAmerica Partners LP, a limited partnership; Docket No. C - 4635, FTC file number 171-0184. In connection with the acquisition by ACT of equity interests in HDS and certain of its affiliates”Page 18 of the 2024 FDD, Item 3
Outcome: “Also on July 6, 2020, the parties entered into a Stipulation on Final Judgment against Respondents in settlement of disputed claims and without any admission of liability by Respondents, pursuant to which Respondents agreed to pay a civil penalty of $3,500,000 within 30 days of the final judgment.” (page 19)
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?