What are some examples of how the Tier II funds are used to promote Circle K stores?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
agencies in developing creative advertising concepts and in various promotional materials for the Circle K System.
Tier II – Local and Regional Promotion. The Tier II component covers local and regional promotional costs to promote Circle K Stores. The monthly fee for this component may
vary based on the particular Designated Marketing Area (DMA) in which your Store is located and is subject to change from time to time. You will pay up to 1.25% of your Store's monthly Gross Sales (on Gross Sales of up to $125,000) for regional promotional costs. All Circle K franchisees who have signed a single site franchise agreement located within a given DMA may not pay the same fee. The Tier II funds will be used to cover regional promotion and equipment upgrades for the Circle K Stores located in your region or DMA, which may also include radio, direct mailings, and newspaper advertising and other regional advertising efforts. At our option, and if there are surplus Local and Regional Promotional Fees, TMC may elect to direct a portion of the Local and Regional Promotional Fees to be used to fund the Local Store Marketing Program ("LSM"). The LSM will allow each franchisee the ability to use a portion o
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, Tier II funds, which come from a monthly fee of up to 1.25% of a store's monthly Gross Sales (on Gross Sales of up to $125,000), are designated for local and regional promotional activities. The specific fee can vary depending on the Designated Marketing Area (DMA) where the Circle K store is located and may change over time. It's important to note that not all franchisees within the same DMA will necessarily pay the same fee. These funds are intended to boost the visibility and customer engagement of Circle K stores within a specific region.
The FDD specifies that Tier II funds may be used for regional promotion and equipment upgrades for Circle K stores within the franchisee's region or DMA. Examples of promotional activities covered by these funds include radio advertising, direct mail campaigns, and newspaper advertising, as well as other regional advertising initiatives. This means that Circle K franchisees benefit from coordinated marketing efforts tailored to their specific geographic area, potentially increasing brand awareness and driving traffic to their stores.
Additionally, the document states that if there are surplus Local and Regional Promotional Fees, Circle K may choose to allocate a portion of these funds to the Local Store Marketing Program (LSM). This program allows individual franchisees to use a portion of the funds on approved marketing and promotional programs at the store level. However, the availability of LSM funds is not guaranteed each year, meaning franchisees should not rely on this as a consistent source of marketing support. Prospective franchisees should inquire about the typical allocation and usage of Tier II funds in their specific DMA to understand the potential marketing support available to them.