What happens if the Underlying Agreement for a Circle K franchise is extended?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Purchaser's participation in any Credit Card Program will be subject to all of the terms and conditions established from time to time by TMC or its affiliates.
Purchaser shall accept all credit cards designated by TMC and will, in addition to the terms and conditions contained in this Agreement, be fully subject to and will comply with all card agreements in force between TMC or its affiliates and VISA, MasterCard, American Express, other card issuers and/or any bank, and these card agreements are expressly incorporated herein by reference.
Purchaser shall not discriminate in any manner against Circle K® credit card holders as opposed to the holders of any other credit card, such as bank credit cards, that Purchaser is authorized to accept.
As used herein the term "Circle K Business" means all business conducted at the Premises (as defined below) under the Circle K trademarks and business system.
Term.
This Agreement shall be effective commencing on the Effective Date and, except as set forth in paragraph 6 below, shall remain in effect for the same term (including any extensions thereof) as (a) the CIRCLE K® Convenience Store Franchise Agreement between TMC and Purchaser for the operation of the Circle K Business at the Premises, if no motor fuel is offered for sale to the public at the Premises (as defined below) or (b) the Circle K® Motor Fuel Agreement or Circle K® Branding Agreement, as applicable, between TMC and Purchaser, for the sale of Circle K-branded motor fuel at the Premises.
The Convenience Store Franchise Agreement, the Motor Fuel Agreement or the Branding Agreement pursuant to which this Agreement was executed by the parties shall be referred to herein as the "Underlying Agreement".
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the agreement regarding credit card programs will remain in effect for the same term, including any extensions, as the Underlying Agreement. The Underlying Agreement refers to either the Circle K Convenience Store Franchise Agreement (if no motor fuel is offered) or the Circle K Motor Fuel Agreement or Circle K Branding Agreement (if motor fuel is offered).
This means that the terms and conditions related to credit card processing, including the acceptance of designated credit cards and compliance with card agreements between TMC or its affiliates and various card issuers (VISA, MasterCard, American Express, etc.), will continue to apply throughout any extension of the primary franchise agreement. Franchisees must adhere to these terms and cannot discriminate against Circle K credit card holders compared to other credit card holders.
For a prospective Circle K franchisee, this implies that the obligations and benefits associated with the credit card program are directly tied to the duration of the main franchise agreement. Any decision to extend the Underlying Agreement should also consider the implications for credit card processing and related fees, ensuring continued compliance and potential impacts on profitability.