Does Circle K guarantee a franchisee's note, lease, or obligations related to a Circle K Branded Business?

According to Circle K's 2025 Franchise Disclosure Document, Circle K does not offer any guarantees for a franchisee's financial obligations related to their Circle K Branded Business. This means that if a franchisee takes out a loan or lease to finance their business, Circle K will not act as a guarantor. The franchisee is solely responsible for fulfilling these obligations. This lack of guarantee is a standard practice in the franchise industry, as it ensures that the financial risk remains with the franchisee.

While Circle K does not guarantee a franchisee's obligations for the Branded Business, they do offer Equipment/Construction Funding to qualified franchisees for their Convenience Store offering. The amount of funding offered depends on whether the Circle K store is newly constructed or a conversion, but it will not exceed the actual costs incurred. For newly constructed stores, Level 2 funding can reach up to $50 per square foot of selling space, while Level 3 funding can reach up to $70 per square foot. For bay-conversions, store re-openings, store expansion projects, or conversions where TMC cannot adequately verify existing sales levels, Level 2 funding is up to $40 per square foot, capped at $90,000, and Level 3 funding is up to $60 per square foot, capped at $135,000.

It is important to note that if a franchisee accepts Incentive/Conversion Funding from Circle K for the Motor Fuel Business, they will be required to sign an Incentive and Amortization Agreement, Promissory Note, Security Agreement, and Personal Guaranty. The personal guaranty that all owners must sign in connection with entering into the Convenience Store Franchise Agreement will also apply to the obligations under the Incentive/Conversion Funding, including the Security Agreement and the Promissory Note. This means that the franchisee's personal assets may be at risk if they default on their obligations under the Incentive/Conversion Funding program.

Prospective franchisees should carefully consider the financial implications of opening a Circle K franchise and ensure they have sufficient capital and access to financing to meet their obligations. They should also consult with a financial advisor to determine the best course of action for their individual circumstances. Understanding the terms of any funding agreements and the potential risks involved is crucial for making an informed decision about investing in a Circle K franchise.