Does a default of the Incentive and Amortization Agreement constitute a default of a Circle K franchisee's obligations under the Convenience Store Franchise Agreement?

According to Circle K's 2025 Franchise Disclosure Document, a default under the Incentive and Amortization Agreement specifically will not constitute a default of a franchisee's obligations under the Convenience Store Franchise Agreement. However, a default under the Incentive and Amortization Agreement will constitute a default under the Motor Fuel Agreement.

Circle K offers an Incentive/Conversion Funding Program for its Motor Fuel business. If a franchisee accepts this funding, they will sign an Incentive and Amortization Agreement, Promissory Note, Security Agreement, and Personal Guaranty. The personal guaranty that all of the franchisee's owners must sign in connection with entering into the Convenience Store Franchise Agreement will apply to the franchisee's obligations under the Incentive/Conversion Funding, including the Security Agreement and Promissory Note.

In the event of any default under the terms of the Incentive and Amortization Agreement, Circle K has the right to (i) require immediate payment of all amounts owing under the Incentive and Amortization Agreement, (ii) collect all amounts owing from the franchisee or any guarantor of the Incentive and Amortization Agreement, (iii) file suit and obtain judgment, (iv) take possession of any collateral, or (iv) sell, lease or otherwise dispose of any collateral at public or private sale, with or without advertisement. Circle K also has the right to exercise any other rights under the Incentive and Amortization Agreement, Security Agreement or Personal Guaranty. This may include foreclosing on any or all of the franchisee's assets and/or taking any legal action against one or more guarantors for payment of all amounts due, and/or exercising its rights under the Security Agreement and/or Personal Guaranty.