What are some examples of how the Tier I fee is used by Circle K?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
, Tier II (Local and Regional Promotion) and Tier III (National Promotional). These components are discussed below:
Tier I – General Promotion. You will pay a monthly fee of 0.25% of your Store's monthly Gross Sales (on Gross Sales of up to $125,000) for general promotional costs. We will use this fee for store image/ customer service inspections, incentive programs for franchisees, administrative costs associated with the Promotional Fund, and to pay for work done by outside advertisin
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 60–72)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the Tier I fee, which is part of the Promotional Fee, is used for general promotional costs. Franchisees pay a monthly fee of 0.25% of their store's monthly Gross Sales, calculated on gross sales up to $125,000, for this tier.
Circle K uses the Tier I fees for several purposes. These include store image and customer service inspections to ensure quality and brand consistency across locations. The fees also fund incentive programs designed to motivate and reward franchisees for achieving certain performance goals. Additionally, the Tier I fees cover the administrative costs associated with managing the Promotional Fund itself, ensuring its efficient operation.
Furthermore, Circle K allocates these funds to pay outside advertising agencies. These agencies are responsible for developing creative advertising concepts and producing various promotional materials for the entire Circle K system. This ensures that Circle K maintains a consistent and appealing brand image through professional marketing efforts. The promotional programs are developed by the marketing department, which handles category development, advertising, marketing calendars, and the production of various advertising materials across different media.