How do I nicely turn down an invitation to "hang out" from a guy who I suspect likes me?

Anonymous
There's this nice guy I know...
He asked for my mobile number a week ago and he has been texting me every day since.
He asked if I want to go to a particular movie with him. I said that I haven't seen the movies that go before it yet. He offered to buy the first movies so that we could watch those and then go to the cinema to watch the third movie...
He said he wants to hang out with me and get to know me better.

I am interested in being friends with him, but I suspect that he may be interested in dating me. I'm already dating someone else and I've fallen really hard for him. I don't want this friend to get false hopes because I know how much it hurts to be led on :(

What should I say to him? I'm thinking of saying something like, "Hey ____, I would really like to be friends with you because I think you're a good guy. But just so you're aware, I am already dating someone else."

He hasn't specified it would be a date... Would it be weird for me to come out and say it like that? Is there a better/kinder way to handle this situation? I need to tell him before we go to the movie...
What you're thinking of saying is fine
Don't bring it up; just assume he wants friendship
You could handle it differently; comment below!
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How do I nicely turn down an invitation to "hang out" from a guy who I suspect likes me?
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