If a Circle K franchisee accepts Level 2 funding for equipment/construction and there is no prohibition on collecting royalty fees on alcohol sales, what is the royalty fee rate as a percentage of gross sales?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
| Amount of Equipment/Construction Funding that Franchisee accepts | Royalty Fee rate (as a percentage of Gross Sales) if no prohibition on collection of royalty fees on sale of alcoholic beverages | Royalty Fee rate (as a percentage of Gross Sales) if state or local law prohibits collection of royalty fees on sale of alcoholic beverages |
|---|---|---|
| No funding | 3.0% | 3.5% |
| Level 1* funding | 3.75% | 4.25% |
| Level 2* funding | 4.5% | 5.0% |
| Level 3* funding | 5.5% | 6.0% |
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the royalty fee rate for a franchisee who accepts Level 2 equipment/construction funding, and operates in an area where there is no prohibition on collecting royalty fees on alcohol sales, is 4.5% of gross sales.
Circle K determines royalty fees based on the amount of equipment/construction funding the franchisee accepts and whether the store is located in an area that prohibits royalty fees on alcohol sales. The levels of funding are defined in Schedule A to the Equipment/Construction Funding Agreement.
It's important to note that the royalty fee rate may be further increased by up to 1.0% under other conditions. The specific royalty fee rate will be noted on the Data Sheet. Franchisees must pay the greater of $1,000 or the calculated percentage of Gross Sales as the monthly royalty fee.