What are the Circle K franchisee's obligations regarding the TMC Software upon termination or non-renewal, as outlined in the Software Agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise or other agreement* | Summary |
|---|---|---|
| its sublicense agreement, bankruptcy, assignment for benefit of creditors, garnishment of Branded Business. | ||
| i. Franchisee's obligations on termination / non renewal | Section 14.7; Sections 1.4, 2.3.6 & 3.3 of Software Agreement; Section 25(d) of Motor Fuel Agreement; Section 9(d) and (e) of Branding Agreement | Convenience Store Franchise Agreement: Payment of all amounts due, including liquidated damages as applicable and any reimbursement for Equipment/Construction Funding, complete de-identification, return all copies of Business Systems Manuals and other proprietary information, cease using the Circle K Marks (also see "r" below). Software Agreement: Return of TMC Software with executed certificate, assignment of equipment lease or sale of equipment to TMC, payment of any fees for disconnection and removal of equipment. Motor Fuel Agreement: Complete de-identification and cease using the Circle K Marks, payment of all amounts due including any incentive funding and liquidated damages. Branding Agreement: Complete de-identification and cease using the Circle K Marks, payment of all amounts due, including liquidated damages, and, at our option, require all retailers to de-identify or cease using the Circle K Marks. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 79–85)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, upon termination or non-renewal of the franchise agreement, the franchisee has specific obligations regarding the TMC Software as detailed in the Software Agreement. These obligations are in addition to other requirements related to the overall franchise agreement.
Specifically, the franchisee is required to return the TMC Software along with an executed certificate confirming its return. Additionally, the franchisee must assign the equipment lease or sell the equipment to TMC. The franchisee is also responsible for paying any fees associated with the disconnection and removal of the equipment.
These stipulations ensure that Circle K maintains control over its proprietary software and equipment, even after a franchise agreement ends. For a prospective franchisee, this means understanding the costs associated with decommissioning the TMC Software and equipment at the end of the franchise term, which could include disconnection fees, equipment sale costs, or lease assignment implications. It is important to review the Software Agreement carefully to fully understand these obligations.