What are the Circle K franchisee's obligations regarding the opening of the store?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
2.1 Non-Exclusive License; Franchised Location; Store Opening. Subject to the terms and conditions herein, Franchisor hereby grants to Franchisee, and Franchisee hereby accepts, a non-exclusive license to establish and operate, during the Term, a Circle K Store, in conformity with the Business System, using the Marks (the "License"), at the location described in the Data Sheet attached hereto as Exhibit 1 (the "Franchised Location"). Franchisee agrees that the Store shall be constructed in accordance with the requirements of this Agreement and should be ready
to open within: (i) 1 year after the Effective Date, if the Store is a Conversion Store; or (ii) 2 years after the Effective Date, if the Store is a New Store. A failure to open a Conversion Store within one year or a New Store within two years will entitle Franchisor to immediately terminate this Agreement without Franchisor incurring any liability for such termination. If this Agreement is so terminated, Franchisee must comply with all post-termination obligations set forth herein, including but not limited to the payment of Liquidated Damages.
7.1 Store Improvements, Fixtures, and Equipment; Compliance with Franchisor's Standards. Franchisor must approve any proposed site for the Franchised Location, which site must meet Franchisor's then-current site selection criteria. The Store building and premises must conform to the approved building plans and specifications, exterior and interior decorating designs, required equipment and color schemes for Circle K Stores. Franchisor will provide Franchisee with a typical Circle K Store floor plan layout and Franchisor's standard construction and equipment specifications, and Franchisee will take all actions necessary to bring the Store into compliance with the then-current layout and equipment specifications prior to the Open Date. If the Store is a Conversion Store, Franchisor, in its sole discretion, may require that the Store either close or remain open for business during the conversion process. Any general contractor or architect that will be making any improvements to the Franchised Location must be pre-approved by Franchisor. Franchisee will effect building improvements and will install such fixtures and equipment at the Store as required by Franchisor's current specifications as set forth in the mandatory provisions of the Business Systems Manuals, and Franchisee will provide Franchisor with an architectural schedule prior to making any renovations to the Store. All plans and specifications must be approved by Franchisor prior to the commencement of construction. All architectural, engineering, construction, and design services for the Store will be at Franchisee's sole cost and responsibility, although Franchisor will consult with Franchisee regarding the design and layout of the Store upon the request of Franchisee. Failure to construct and furnish the Store in accordance with the plans and specifications may result in termination of this Agreement.
Franchisee must complete the Training Program no earlier than one hundred eighty (180) days prior to the opening of the Store.
If the Training Program is completed more than one hundred eighty (180) days prior to the opening of the Store, Franchisee will need to be recertified by Franchisor before Franchisor will approve the opening of the Store.
If Franchisee is an existing convenience store franchisee of Franchisor, Franchisee may be required to attend a modified training program (the "Modified Training Program"), which will
be shorter in duration than the Training Program. If required, Franchisee must complete the Modified Training Program no earlier than one hundred eighty (180) days prior to the opening of the Store. If the Modified Training Program is completed more than one hundred eighty (180) days prior to the opening of the Store, Franchisee will need to be recertified by Franchisor before Franchisor will approve the opening of the Store. Regardless of whether Franchisee attends the Training Program or Modified Training Program, Franchisee must complete all pre-classroom assignments and pass the same final exam required of all Circle K franchisees.
Any training provided by Franchisor to any of Franchisee's employees will be limited to training or guiding the employees regarding the provision of approved products and services to customers in a manner that reflects the customer service standards of the Circle K System. Franchisee is, and will remain, the sole employer of its employees at all times, including during all training programs, and Franchisee is solely responsible for all employment decisions and actions related to its employees. Franchisee is solely responsible for ensuring that its employees receive adequate training.
Unless exempted by Franchisor, Franchisee will conduct a grand opening advertising and promotional campaign in connection with the opening of the Store within one hundred (100) days of the date that Franchisee begins conducting business at the Store hereunder.
Franchisor will reasonably assist Franchisee with developing and carrying out such grand opening campaign and will furnish Franchisee with a grand opening materials package.
All grand opening activities and related publicity and promotional materials must receive Franchisor's prior written approval.
All publicity and promotional costs including the full cost of any price reductions and other customer inducements incurred in such grand opening advertising campaign will be at the sole expense of Franchisee, which expense will be in addition to Franchisee's obligation to pay the Promotional Fees as set forth above; provided, however, that Franchisor will reimburse Franchisee (from the Local and Regional Promotional Fees) any pre-approved expenditures in the amount of $.50 for each $1.00 Franchisee spends, up to a maximum reimbursement of $4,000.
Franchisee agrees to work with the third-party management firm designated by Franchisor in connection with the construction and development of Franchisee's Store. A list of the thirdparty management firms currently used by Franchisor is included in the Business Systems Manuals and may be revised by Franchisor from time to time. Franchisee must obtain Franchisor's prior written approval if it wishes to use a third-party management firm that Franchisor has not designated.
Unless excused in writing by Franchisor, Franchisee will be actively involved in the day-to-day operations of the Store and will spend adequate management time required to maintain the standards required hereunder. If Franchisee is acquiring the rights to operate more than one Circle K Store, Franchisee will be actively involved in the supervision of management of all of the Circle K Stores owned by Franchisee and will spend adequate management time to ensure Franchisor's standards are maintained at all Stores.
The Store Manager must successfully complete Franchisor's training program prior to the opening of the Store.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, franchisees have several obligations regarding the opening of their store. Franchisees must ensure the store is ready to open within one year of the Effective Date if it is a Conversion Store, or within two years if it is a New Store. Failure to meet these deadlines may result in the termination of the franchise agreement, potentially incurring liquidated damages. The franchisee is responsible for store construction according to Circle K's standards and must use Circle K's approved building plans, specifications, and designs. Any contractors or architects must be pre-approved by Circle K. Franchisees must also adhere to Circle K's layout and equipment specifications before the store's opening.
Prior to opening, the franchisee or their operations manager and one store manager must complete Circle K's training program. This training should be completed no more than 180 days before the store opening. If training is completed earlier, recertification is required. Existing Circle K franchisees may attend a modified, shorter training program, but must still meet the same recertification requirements if the training is completed too far in advance. All franchisees must complete pre-classroom assignments and pass the final exam. The franchisee is responsible for adequately training their employees to Circle K's customer service standards.
Additionally, unless exempted by Circle K, the franchisee must conduct a grand opening advertising and promotional campaign within 100 days of opening the store. Circle K will assist in developing this campaign and provide a grand opening materials package. While the franchisee bears the costs of the grand opening, Circle K will reimburse pre-approved expenditures at a rate of $.50 per $1.00 spent, up to a maximum of $4,000, drawn from Local and Regional Promotional Fees. Franchisees are also expected to actively participate in the day-to-day operations of the store and maintain Circle K's standards. If the franchisee is not directly managing the store, they must hire a store manager who has successfully completed Circle K's training program and meets certain suitability criteria.