Is a Circle K franchisee allowed to operate another business at the Franchised Location?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
ales as noted herein.
You are prohibited from operating another business, including another royalty-based franchised business with separate point-of-sale equipment, at your Store or at the Franchised Location, unless you obtain our prior written consent. Our consent may be conditioned on your agreement that sales from any such other business will be included in Gross Sales for the purposes of calculating your Royalty and Promotional Fee payments under your Franchise Agreement. Operation of any such other business at your Store or at the Franchised Location without our prior written consent will be a material breach of your Franchise Agreement.
Royalty Fees are payable to us and are non-refundable. All monthly payments required by the Convenience Store Franchise Agreement must be paid by electronic funds transfer via the Automated Clearing House ("ACH") or wired to us or our affiliate by the 25th day of each month for the preceding calendar month's business activity. If the 25th day of the month falls on a Saturday or Sunday, such fees shall be paid on the Monday following the 25th day of the month. Any payment not actually received on or before such date will be deemed overdue.
2 Your monthly Royalty Fee rate will depend on: (i) the amount of Equipment/Construction Funding you choose to accept from us, (ii) whether your Store is located in an area that prohibits or restricts the collection of royalties on the sale of alcoholic beverages, and (iii) whether we allow you to install gaming machines in the Store.
Source: Item 6 — OTHER FEES (FDD pages 22–35)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, franchisees must obtain written approval from Circle K before operating any other business from their store. If Circle K approves a separate food service business, referred to as an "Additional Business," the franchisee is required to pay a Co-Branded Royalty Fee, calculated as a percentage of the Additional Business's Gross Sales. The FDD states that Circle K currently charges a Co-Branded Royalty Fee of 1% of the Additional Business's Gross Sales, but they reserve the right to charge up to 2%.
Circle K may, at its sole discretion, approve an unaffiliated third-party operator for the Additional Business within the store, subject to terms and conditions established by Circle K. In such cases, the franchisee must provide a copy of their lease with the third-party operator, and the third-party operator must provide their executed franchise agreement with the Additional Business franchisor to TMC (presumably Circle K's parent company). Alternatively, the third-party operator may need to enter into an agreement with TMC in a form provided by TMC.
It's important to note that franchisees are prohibited from operating another business, including another royalty-based franchised business with separate point-of-sale equipment, at the Circle K store or franchised location without prior written consent. Circle K's consent may be conditional, requiring that sales from any such other business be included in Gross Sales for the purposes of calculating Royalty and Promotional Fee payments under the Franchise Agreement. Operating another business without prior written consent constitutes a material breach of the Franchise Agreement.