What constitutes a waiver of the option to renew a Circle K franchise agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
"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, a franchisee's option to renew their franchise agreement can be waived if they fail to provide written notice of their desire to seek a new license at least six months before the expiration of the current term. This requirement is a critical component of the renewal process, and missing the deadline results in an automatic waiver of the renewal option.
To maintain eligibility for renewal, Circle K franchisees must adhere to several conditions throughout the term of their agreement. They must comply with all material terms and conditions of the agreement, operate the store in accordance with the standards and procedures of the Circle K Business System, and not be in default under any agreement with Circle K or its affiliates. Additionally, the store's average gross sales for the 12 months before the term's expiration must exceed $75,000 per month.
Furthermore, Circle K franchisees must maintain a satisfactory customer service record, free from numerous or egregious bona fide customer complaints. They may also be required to upgrade or renovate the franchised location to meet then-current standards for new franchisees or relocate to a new location that meets these standards. Franchisees might also need to add Circle K branded motor fuel or cease offering third-party fuel. Meeting all these conditions, including providing timely written notice, is essential for a Circle K franchisee to successfully renew their franchise agreement.