What happens if a Circle K franchisee assigns or transfers their rights in the agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
8. Assignment.
- (a) This Agreement is personal to Licensee. Licensee's interest in this Agreement shall not be transferred or assigned by Licensee in whole or in part, directly or indirectly, without the prior written consent of TMC and provided the following conditions are satisfied: (i) new Licensee ("Assignee") meets TMC's qualifications, (ii) Assignee signs TMC's current form of branding agreement, (iii) Assignee assumes all obligations under this Agreement, (iv) the CIRCLE K convenience store located at the Premises is also transferred to Assignee in accordance with the assignment conditions set forth in Licensee's Franchise Agreement, (v) any Sublicense Agreements entered into in connection with this Agreement are also transferred to Assignee, (vi) all amounts due TMC are paid in full, and (vii) release signed by Licensee.
- (b) Subparagraph (a) above applies if any change in the control of the Licensee occurs including, without limitation, the sale, conveyance, alienation, transfer or other change of interest in, or title to, or beneficial ownership of, any voting stock, membership interest, or partnership interest, of or in the Licensee, whether voluntarily, involuntarily, by operation of law, merger or otherwise. A "change in the control" of Licensee shall be deemed to occur whenever a
party gains the ability to influence the business and affairs of Licensee directly or indirectly. A party who owns, or otherwise possesses, twenty-five percent (25%), or more, of the voting stock, membership interest, partnership interest, or beneficial interest shall be deemed to have such ability.
(c) TMC may assign this Agreement in whole or in part upon ten (10) days' prior written notice to Licensee.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the Branding Agreement is personal to the Licensee, meaning a franchisee's interest in the agreement cannot be transferred or assigned, either in whole or in part, directly or indirectly, without TMC's (TMC Franchise Corporation) prior written consent.
For a Circle K franchisee to assign their rights, several conditions must be met. First, the new licensee (Assignee) must meet TMC's qualifications. Second, the Assignee must sign TMC's current form of branding agreement and assume all obligations under the existing agreement. Third, the Circle K convenience store at the premises must also be transferred to the Assignee, following the conditions outlined in the Franchise Agreement. Any Sublicense Agreements connected to the Branding Agreement must also be transferred to the Assignee. Finally, all amounts due to TMC must be paid in full, and the current franchisee (Licensee) must sign a release.
The FDD also specifies that these conditions apply if there is any change in control of the Licensee, including but not limited to a sale, conveyance, or transfer of interest in the voting stock, membership interest, or partnership interest of the Licensee. A change in control is defined as any situation where a party gains the ability to influence the business and affairs of the Licensee, directly or indirectly, including ownership of 25% or more of the voting stock, membership interest, or partnership interest. TMC, however, may assign the agreement in whole or in part by providing the Licensee with ten days' prior written notice.