What article of the Circle K franchise agreement discusses the term and renewal options?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
t (50%) of Franchisor's then-current initial franchise fee. In connection with Franchisor's approval of the relocation, Franchisor reserves the right to require Franchisee to execute Franchisor's then-current form of franchise agreement.
ARTICLE 3 TERM; FRANCHISEE'S OPTION TO RENEW
- 3.1 Term. The term of this Agreement (the "Term") begins on the Effective Date and will expire on the tenth (10th) anniversary of the Open Date (the "Expiration Date"), unless earlier terminated in accordance with Article 13. Once established by Franchisor, the Open Date and the Expiration Date will be noted on the Data Sheet.
- 3.2 Conditions to Renew. Upon expiration of the Term, Franchisee will have an option to receive an offer of a new license for the Franchised Location for one renewal term equal to the initial term of the then-current form of franchise agreement of Franchisor; provided that: (1) Franchisor has not determined, before the end of the Term, in good faith and in the normal course of business either (i) that renewal of the franchise relationship is likely to be not economical for Franchisor, or (ii) to withdraw from the relevant geographic market in which the Store is located; and (2) Franchisee is in Good Standing and has agreed to and has complied with all of the following conditions:
- (A) Franchisee has given Franchisor written notice of its desire to seek such a new license at least six (6) months prior to the expiration of the Term. (Franchisee's failure to timely provide such notice will be deemed a waiver of the option to renew.)
- (B) Throughout the Term, Franchisee has complied in good faith with all material terms and conditions of this Agreement and has operated the Store in compliance with the material operating and quality standards and procedures of the Business
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, Article 3 of the franchise agreement covers the term and the franchisee's option to renew. Specifically, Article 3.1 outlines the term of the agreement, stating that it begins on the Effective Date and expires on the tenth anniversary of the Open Date, unless terminated earlier according to Article 13. The Open Date and Expiration Date are noted on the Data Sheet once established by Circle K.
Article 3.2 details the conditions for renewal. Upon the term's expiration, franchisees have the option to receive an offer for a new license for one renewal term, which is equal to the initial term of Circle K's then-current franchise agreement. However, this is conditional on Circle K not determining, in good faith and in the normal course of business, that renewal is not economical or that they intend to withdraw from the geographic market.
To qualify for renewal, the franchisee must be in good standing and meet several conditions. These include providing written notice of their desire to renew at least six months before the term expires, complying with all material terms of the agreement throughout the term, operating the store in compliance with Circle K's operating and quality standards, and not being in default under any agreement with Circle K or its affiliates. Additionally, the average gross sales at the franchisee's store for the previous 12 months must exceed $75,000 per month.