What conditions must a Circle K purchaser satisfy to receive the Competitive Allowance payments?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
(ii) Seller agrees to pay unto Purchaser the amount equal to the Competitive Allowance set forth in the Incentive Amounts Schedule, provided that, as of the time each such payment is due from Seller to Purchaser as set forth in the Incentive Amounts Schedule, Purchaser has satisfied those conditions contained in paragraph 1(c) and in the Incentive Amounts Schedule.
(c) Additional Conditions.
The following are additional conditions for [Seller's obligation to pay unto Purchaser, and Purchaser's right to receive, the Competitive Allowance / Seller's obligation to lend and disburse to Purchaser, and Purchaser's right to receive, the Conversion/Improvement Amount].
Purchaser's breach of or failure to satisfy any of the following conditions after Seller has disbursed the Conversion/Improvement Amount to Purchaser shall constitute an Acceleration Event (as defined in paragraph 2(c) below):
(i) The Premises shall be approved by Seller for marketing motor fuel under the Proprietary Marks.
(ii) The Motor Fuel Agreement must be current (unexpired) and in effect.
(iii) Purchaser shall not be in default of any provision of this Agreement, the Motor Fuel Agreement, the Security, or any other related or supplemental agreement with Seller including, without limitation, any provision therein requiring timely payment to Seller.
(iv) Purchaser shall comply, and cause the Premises to comply, with Seller's Image Standards throughout the term of this Agreement; provided, however, that with respect to Conversion/Improvement Amount, this obligation shall only apply after Seller has approved the Improvements and/or Conversion as complying with Seller's Image Standards pursuant to paragraph 1(b) above.
(v) Purchaser shall pay when due all income and other tax, if any, associated with the [Competitive Allowance payments / loan of the Conversion/Improvement Amount] under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a purchaser must satisfy specific conditions to receive the Competitive Allowance payments. These conditions are detailed in paragraph 1(c) and the Incentive Amounts Schedule. Specifically, as of the time each payment is due, the purchaser must meet these requirements to be eligible for the Competitive Allowance.
The conditions include ensuring that the premises are approved by Circle K for marketing motor fuel under its Proprietary Marks. The Motor Fuel Agreement must also be current and in effect, meaning it has not expired. Furthermore, the purchaser must not be in default of any provision of the Franchise Agreement, the Motor Fuel Agreement, the Security agreement, or any other related agreement with Circle K, including timely payment obligations.
Additionally, the purchaser must comply and ensure the premises comply with Circle K's Image Standards throughout the term of the agreement. The purchaser is also responsible for paying all income and other taxes associated with the Competitive Allowance payments. Failure to meet any of these conditions could result in the purchaser not receiving the Competitive Allowance payments from Circle K.