For a Circle K franchise, what does the Equipment/Construction Funding Agreement's Schedule A specify?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
ulfill its obligations hereunder.
IN WITNESS WHEREOF, Franchisee and Franchisor hereby executed this Agreement as of the Effective Date:
| FRANCHISOR: TMC Franchise Corporation | FRANCHISEE: «ContractName» |
|---|---|
| Signature: | Signature: |
| Justin Shelton, Asst. Secretary | Title: |
| Effective Date: | Date: Signature: Title: Date: Signature: Title: Date: |
Schedule A to Equipment/Construction Funding Agreement
For a newly constructed Circle K Store and raze and rebuilds, two levels of funding are available, which, for purposes of the calculation of the Royalty Fees are referred to as "Level 2" funding amount and "Level 3" funding amount. The "Level 2" Maximum Amount is up to $50 for each square foot of selling space the Store contains. The "Level 3" Maximum Amount is up to $70 for each square foot of selling space the Circle K Store contains. Franchisor will determine the square footage of the Circle K Store to establish the Maximum Amount.
For bay conversions, store re-openings, store expansion projects, or conversions where Franchisor cannot adequately verify existing sales levels, two levels of funding are available, which, for purposes of the calculation of the Royalty Fees are referred to as "Level 2" funding and "Level 3" funding. The "Level 2" Maximum Amount is up to $40 for each square foot of selling space the Circle K Store contains, capped at $90,000. The "Level 3" Maximum Amount is up to $60 for each square foot of selling space the Circle K Store contains, capped at $135,000. Franchisor has the right to determine the square footage to establish the Maximum Amount.
For a Conversion Store, the Maximum Amount
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, Schedule A of the Equipment/Construction Funding Agreement outlines the funding options available to franchisees. For newly constructed Circle K stores and raze-and-rebuild projects, there are two funding levels: Level 2 and Level 3. Level 2 provides up to $50 per square foot of selling space, while Level 3 offers up to $70 per square foot. The franchisor determines the store's square footage to calculate the maximum funding amount.
For bay conversions, store re-openings, expansion projects, or conversions where existing sales levels cannot be adequately verified, Circle K also offers Level 2 and Level 3 funding. Level 2 provides up to $40 per square foot, capped at $90,000, and Level 3 provides up to $60 per square foot, capped at $135,000. Again, Circle K determines the square footage to establish the maximum funding amount.
For a Conversion Store, the Maximum Amount is based on the verified annual amount of the Conversion Store's Gross Sales for the most recently completed 12-month period as determined by Franchisee and Franchisor. If the Conversion Store's tobacco sales as a percentage of the total sales are substantially over the average for such percentage, the funding may be altered. Otherwise, the Maximum Amount for Conversion Stores is as follows:
This schedule is important for prospective franchisees as it details the potential funding available from Circle K for equipment and construction, which can significantly offset initial investment costs. However, the actual funding amount depends on factors such as the type of store (new construction vs. conversion), the store's square footage, and, in the case of conversions, the store's gross sales and tobacco sales percentage. Franchisees should carefully review this schedule and discuss their specific circumstances with Circle K to determine the funding level for which they qualify.