How is the Equipment/Construction funding amount determined for a Circle K conversion store?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
t $135,000. TMC has the right to determine the square footage to establish the maximum amount of the funding.
For a conversion Store, the amount of the funding specified in the Equipment/Construction Funding Agreement is based on the verified annual amount of your existing convenience store's Gross Sales for the most recently completed 12-month period as determined by you and us. If your conversion Store's tobacco sales as a percentage of your total sales are substantially over the average for such percentage, your funding may be altered. In addition, TMC reserves the right to modify the amount of the funding if, subsequent to the parties' execution of the Equipment/Construction Funding Agreement but before the store is deemed open as a Circle K Store, the merchandise sales levels drop below the amount used by TMC to set the original funding amount. Otherwise, funding for conversion Stores is as follows:
Level 1 Funding for Existing C-Store
| Average Gross Sales | Equipment/Construction Funding |
|---|---|
| (last 12 months) | Available |
| $50,000 or less | Up to 0.5 times Gross Sales |
| $50,001 to $75,000 | Up to 0.6 times Gross Sales |
| $75,001 to $100,000 | Up to 0.7 times Gross Sales |
| $100,000+ | Up to 0.75 times Gross Sales |
Level 2 Funding for Existing C-Store
| Average Gross Sales | Equipment/Construction Funding |
|---|---|
| (last 12 months) | Available |
| $50,000 or less | Up to 0.8 times Gross Sales |
| $50,001 to $75,000 | Up to 0.9 times Gross Sales |
| $75,001 to $100,000 | Up to 1.1 times Gross Sales |
| $100,001 to $150,000 | Up to 1.2 times Gross Sales |
| $150,001+ | Up to 1.3 times Gross Sales |
Level 3 Funding for Existing C-Store
| Average Gross Sales (last 12 months) | Equipment/Construction Funding Available |
|---|---|
| $50,000 or less | Up to 0.5 times Gross Sales |
| $50,001 to $75,000 | Up to 0.6 times Gross Sales |
| $75,001 to $100,000 | Up to 0.7 time |
Source: Item 10 — FINANCING (FDD pages 55–60)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the Equipment/Construction funding for a conversion store is based on the verified annual Gross Sales of the existing convenience store for the most recent 12-month period, as determined by both the franchisee and Circle K. The FDD outlines different funding levels based on these sales figures. Specifically, the funding available is tied to the store's average gross sales over the last 12 months.
According to the FDD, the Level 1 funding is determined by the table. If the conversion store's tobacco sales are substantially higher than average, Circle K may adjust the funding amount. Additionally, Circle K reserves the right to modify the funding amount if merchandise sales drop below the level used to set the original funding before the store opens as a Circle K.
For bay-conversions, store re-openings, store expansion projects, or conversions where TMC cannot adequately verify existing sales levels, two levels of funding are available, which for purposes of the calculation of Royalty Fees are referred to as "Level 2" funding amount and "Level 3" funding amount. The Level 2 funding amount of the Equipment/Construction Funding is up to $40 for each square foot of selling space your Store contains, capped at $90,000. The Level 3 funding amount of the Equipment/Construction Funding is up to $60 for each square foot of selling space your Store contains, capped at $135,000. TMC has the right to determine the square footage to establish the maximum amount of the funding.
Prospective franchisees should carefully review their existing sales data and discuss the verification process with Circle K to understand the potential funding available. Franchisees should also be aware of the conditions that could lead to adjustments in the funding amount, such as high tobacco sales or a drop in merchandise sales before the store's opening as a Circle K.