What is the deadline for opening a Circle K New Store after the Effective Date?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
2.1 Non-Exclusive License; Franchised Location; Store Opening. Subject to the terms and conditions herein, Franchisor hereby grants to Franchisee, and Franchisee hereby accepts, a non-exclusive license to establish and operate, during the Term, a Circle K Store, in conformity with the Business System, using the Marks (the "License"), at the location described in the Data Sheet attached hereto as Exhibit 1 (the "Franchised Location"). Franchisee agrees that the Store shall be constructed in accordance with the requirements of this Agreement and should be ready
to open within: (i) 1 year after the Effective Date, if the Store is a Conversion Store; or (ii) 2 years after the Effective Date, if the Store is a New Store. A failure to open a Conversion Store within one year or a New Store within two years will entitle Franchisor to immediately terminate this Agreement without Franchisor incurring any liability for such termination. If this Agreement is so terminated, Franchisee must comply with all post-termination obligations set forth herein, including but not limited to the payment of Liquidated Damages.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a franchisee has two years from the Effective Date of the Franchise Agreement to open a New Store. The Effective Date is determined when the franchise agreement is executed. If the franchisee fails to open the New Store within this two-year timeframe, Circle K has the right to terminate the agreement immediately.
This deadline is significant because it sets a clear expectation for how quickly a franchisee must get their New Store operational. Failing to meet this deadline can result in the termination of the franchise agreement, which would mean the franchisee loses the rights to operate the Circle K store.
In the event of termination due to failure to open the store on time, the franchisee is obligated to fulfill all post-termination requirements. This includes the payment of liquidated damages to Circle K. The liquidated damages are calculated based on a formula that considers the average monthly royalty fee payments and the remaining term of the agreement. This financial implication underscores the importance of meeting the opening deadline.