Is the Circle K franchisee required to purchase motor fuel exclusively from the Seller?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) If, upon expiration of the Term of the Agreement or any renewal thereof, and for a period of one (1) year thereafter, Purchaser receives, or has received, from a ready, willing and able seller ("Proposed Supplier"), a bona fide offer (the "Offer") to sell or supply motor fuels to Purchaser for resale at the Premises, and Purchaser at that time is ready and willing to accept said Offer, Purchaser shall give Seller written notice ("Notice"), setting forth the name and address of the Proposed Supplier, and the terms of said Offer. Such Notice shall be accompanied by Purchaser's verified affidavit that the proposed Offer is a good faith offer.
Seller's rights described herein shall apply to any bona fide Offer to sell motor fuel products received by Purchaser, irrespective of whether such offer is written or oral and irrespective of the duration or terms of such offer.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to the 2025 Circle K Franchise Disclosure Document, a franchisee is not permanently bound to purchase motor fuels exclusively from Circle K's designated supplier. The FDD outlines a process where, under certain conditions, a franchisee can explore alternative fuel suppliers.
Specifically, if within one year after the expiration of the franchise term, the franchisee receives a legitimate offer from another supplier, they are obligated to notify Circle K. This notification must include the potential supplier's details and the terms of their offer, accompanied by an affidavit confirming the offer's validity. This process allows the franchisee to potentially switch suppliers at the end of their franchise agreement, provided they follow the outlined procedure and Circle K does not match the offer.
Circle K retains the right to evaluate and potentially match any offer from a proposed supplier. This clause ensures that Circle K has the opportunity to remain competitive and retain the franchisee's business. However, it also provides the franchisee with a mechanism to seek more favorable supply terms if available in the market, promoting a degree of flexibility after the initial franchise term concludes.
This arrangement is not uncommon in the franchise industry, where franchisors often require initial exclusive supply agreements to maintain quality control and brand consistency. However, providing an avenue for franchisees to explore alternative suppliers at the end of the term can foster a more balanced relationship and ensure that franchisees have options to optimize their business operations.