What happens to any Sublicense Agreements connected to the Circle K license when it is assigned?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
(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.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, if a Circle K licensee assigns their license agreement to a new licensee (the "Assignee"), any Sublicense Agreements that were entered into in connection with the original license agreement are also transferred to the Assignee. This means that the new licensee takes over the rights and responsibilities of the original licensee with respect to those Sublicense Agreements.
For a prospective Circle K franchisee, this means that if they are considering purchasing an existing Circle K franchise, they should carefully review any Sublicense Agreements that are in place. They will be responsible for fulfilling the obligations of those agreements if the assignment is approved. This could include agreements with vendors, suppliers, or other third parties.
It is important to note that the assignment of the license agreement is not automatic. The new licensee must meet Circle K's qualifications, sign Circle K's current branding agreement, assume all obligations under the existing license agreement, and ensure that the Circle K convenience store at the premises is also transferred. Additionally, all amounts due to TMC must be paid in full, and the original licensee must sign a release. These conditions ensure that Circle K maintains control over who operates its branded locations and that all financial obligations are met during the transfer process.