What conditions must a Circle K purchaser satisfy to receive the Conversion/Improvement Amount?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
n to pay, and Purchaser's entitlement to receive, the Competitive Allowance shall immediately terminate or expire, without notice, concurrently therewith.
- (iv) Purchaser shall not be obligated to reimburse to Seller the Competitive Allowance, or any portion thereof, received from Seller.
- (b) Conversion/Improvement Amount. The terms of this paragraph 1(b) shall apply only if the following blanks are initialed by both Seller and Purchaser:
| Seller's Initials | Purchaser's Initials |
|---|
- (i) By their initials in the space provided above for application of this paragraph 1(b) and their execution of this Agreement, Seller and Purchaser agree as follows. Seller agrees to loan Purchaser the "Conversion Amount" and/or the "Improvement Amount" (collectively, the "Conversion/Improvement Amount"), as defined in subparagraph (ii) below. Purchaser desires to make certain improvements at the Premises as set forth more fully in the Conversion/Improvements Schedule attached hereto and made a part hereof (the "Improvements") and/or desires to convert the Premises to Seller's requirements for marketing motor fuel under the Proprietary Marks, including Seller's Image Standards (such conversion hereinafter referred to as the "Conversion"). The "Conversion" shall include, without limitation, the implementation, installation, and performance of the items set forth in the Conversion/Improvements Schedule attached hereto and incorporated herein.
- (ii) Seller agrees to loan Purchaser: (A) an improvement amount equal to the Improvement Amount set forth in the Incentive Amounts Schedule (said amount is the "Improvement Amount") for the sole purposes of constructing, installing and implementing the Improvements, provided that the Improvements conform with Seller's Image Standards; and/or (B) a conversion amount equal to the Conversion Amount set forth in the Incentive Amounts Schedule (said amount is the "Conversion Amount") to assist Purchaser in implementing the Conversion. Seller's obligation to disburse unto Purchaser the Conversion/Improvement Amount is conditioned upon Purchaser's satisfaction, at the time such disbursement is due by Seller to Purchaser as set
forth in the Incentive Amounts Schedule, of all of the following conditions and the conditions contained in paragraph 1(c) below: (A) Purchaser shall have obtained, and provided to Seller written verification reasonably satisfactory to Seller that Purchaser has obtained, all approvals, permits, licenses, entitlements, and consents required to make the Improvements and/or Conversion. (B) Purchaser shall have duly executed and delivered to Seller (1) a promissory note in substantially the form attached hereto as Exhibit A and incorporated herein, in a principal amount equal to the Conversion/Improvement Amount ("Note"), and (2) a Security Agreement and Personal Guaranty in substantially the form attached to the Franchise Disclosure Document as Exhibit J. (C) Purchaser shall have provided Seller with reasonable proof the Purchaser has entered into all agreements using only Seller approved contractors and other third parties necessary for Purchaser to construct and install and/or make, at Purchaser's sole expense, the Improvements and/or Conversion set forth in the Conversion/Improvements Schedule. (D) Purchaser shall expend the Conversion/Improvement Amount solely for the purposes of constructing, installing and implementing the Improvements and/or performing the Conversion. Upon demand by Seller, Purchaser shall provide any documentation reasonably required by Seller to substantiate the expenditure of the Conversion/Improvement Amount for the purposes herein stated, including, without limitation, proof of payment for third-party invoices and related lien releases for work and materials for the Improvements and/or Conversion.
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 several conditions to receive the Conversion/Improvement Amount. Circle K agrees to loan the purchaser a Conversion/Improvement Amount to be used for the conversion of, or improvements to, the premises, as set forth on the Conversion/Improvements Schedule. The purchaser must obtain Circle K's prior approval of the exterior architectural and signage plans before submitting them with the applicable fuel business permit applications. The purchaser will be responsible for the installation and maintenance of all Circle K image components. The Conversion/Improvement Amount will be used to reimburse the purchaser's cost of acquisition of certain equipment, other personal property, real property, and fixtures, and construction at the premises, and for TMC to pay related invoices on the purchaser's behalf, in accordance with the Conversion/Improvements Schedule.
To receive the Conversion/Improvement Amount, the purchaser must obtain all necessary approvals, permits, licenses, entitlements, and consents required to make the Improvements and/or Conversion, providing written verification to Circle K. The purchaser must also execute and deliver a promissory note and a Security Agreement and Personal Guaranty to Circle K. The purchaser needs to provide reasonable proof that they have entered into agreements with Circle K-approved contractors and other third parties necessary for the construction, installation, and implementation of the Improvements and/or Conversion, all at the purchaser's sole expense.
The purchaser must expend the Conversion/Improvement Amount solely for constructing, installing, and implementing the Improvements and/or performing the Conversion. Upon Circle K's demand, the purchaser must provide documentation to substantiate the expenditure, including proof of payment for third-party invoices and related lien releases. The purchaser must complete the Improvements and/or Conversion to Circle K's reasonable satisfaction by the Completion Deadline, which is specified as a blank date field in the document. Within ten days after completion, the purchaser must provide Circle K with documentation evidencing the completion of the Improvements and/or Conversion.