If a transferee-franchisee of a Circle K franchise fails to complete required upgrades and renovations within nine months of the transfer, by how much will their royalty fee rate be increased?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (H) Upgrading.
Franchisee will have agreed to perform specified upgrading and/or renovation of the Franchised Location and the Store to conform to the current standards and image then required by Franchisor of its new franchisees.
All such upgrades and renovations shall be completed within nine months of the Transfer.
If the transferee-franchisee fails to timely complete the required upgrades and renovations, its royalty fee rate will be increased by 1% until such time as all required upgrades and renovations have been completed and the default is cured.
In addition, in such a situation, Franchisor will have the right to exercise all other rights available to it under the transferee's franchise agreement and applicable law, including the right to terminate the franchise agreement.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a transferee-franchisee must complete specified upgrades and renovations to the franchised location within nine months of the transfer date to meet Circle K's current brand standards. These upgrades ensure the store aligns with the image required of new franchisees.
If the transferee-franchisee fails to complete these required upgrades and renovations within the specified nine-month timeframe, Circle K will increase the royalty fee rate by 1%. This increase remains in effect until all required upgrades and renovations are completed and the default is resolved.
In addition to the royalty fee increase, Circle K retains the right to exercise all other rights available under the transferee's franchise agreement and applicable law. This includes the potential right to terminate the franchise agreement if the non-compliance persists. This provision underscores the importance of adhering to the upgrade and renovation schedule to avoid financial penalties and potential termination of the franchise agreement.