What is the 'Franchisor Fuel Supply Right' for Circle K?

If at the time you enter into a Franchise Agreement with us, you are subject to a third-party fuel supply arrangement to sell at the Franchised Location third-party motor fuel, we will have a right (but not an obligation) to begin supplying Circle K branded fuel to you upon expiration of the third-party fuel supply arrangement (the "Franchisor Fuel Supply Right"). You will be required to provide written notice of the third-party fuel supply arrangement's expiration (the "Expiration Notice") to us at least six months prior to

the expiration of such third-party fuel arrangement (the date of such Expiration Notice, the "Notice Date"). If, prior to the Notice Date, you have secured a new bona fide written offer from a reputable third-party fuel supplier setting forth fuel supply terms for the Franchised Location that are binding on the offeror (a "Third-Party Fuel Offer"), you will be required to provide to us a copy of the Third-Party Fuel Offer (including related documentation) together with the Expiration Notice.

If we wish to exercise the Franchisor Fuel Supply Right, we will deliver written notice to that effect ("Notice of Exercise") to you within 30 days of our receipt of the Expiration Notice. Upon delivery of the Notice of Exercise, we and you will then work together to accomplish a smooth transition of the fuel supply at the Franchised Location from the third-party supplier to us, and in connection therewith, we and you will enter into, as soon as reasonably practicable: (i) our standard form of franchise agreement for the operation of the Other Circle K Franchised Outlet (i.e., a combined retail convenience store and motor fuel business operating under the Circle K trade name and service marks and the Circle K business system) (such franchise agreement, which Circle K Business Franchise Agreement will replace and supersede your existing Franchise Agreement; provided, that you will not be required to pay an Initial Franchise Fee, and (ii) all related agreements, including, without limitation, a Motor Fuel Supply Agreement then-offered by us, pursuant to which we will supply Circle K branded fuel to you at the Franchised Location, in accordance with the terms included in our then-current Franchise Disclosure Document for the Other Circle K Franchised Outlets, provided, that if you have timely presented to us a Third-Party Fuel Offer as described above, the Motor Fuel Supply Agreement will be revised to include substantially the same price and delivery terms as such Third-Party Fuel Offer. You acknowledge that the Circle K Business Franchise Agreement may include terms and conditions (including fees, funding and requirements related to technology and reporting) that may be materially different from the terms and conditions of the Franchise Agreement.

If we elect not to exercise our Franchisor Fuel Supply Right, your acceptance of a Third-Party Fuel Offer will be subject to our prior written approval of the brand of fuel to be offered at the Franchised Location. If we elect to exercise the Franchisor Fuel Supply Right but you refuse to sign the Circle K Business Franchise Agreement or any other related agreement, we will have the right to terminate the Franchise Agreement, and if we exercise such termination right, you will be subject to all of the post-termination obligations thereunder, including, without limitation, an obligation to pay Liquidated Damages under the Franchise Agreement.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 10–16)