What interest rate may TMC charge a Circle K licensee on past due amounts?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, if Licensee fails to timely pay TMC any amounts due under this Agreement by the due date, the payment will be considered late and TMC may charge Licensee interest on the amount past due at the lesser of 1½ % per month or the maximum legal rate allowed under applicable law.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, if a licensee fails to make timely payments to TMC, the payment is considered late. TMC can then charge interest on the past due amount. The interest rate will be the lesser of 1½% per month or the maximum legal rate allowed by applicable law.
This means that a Circle K licensee could face a significant financial penalty for late payments, potentially up to 18% annually if 1½% per month is less than the maximum legal rate. Franchisees should ensure they have sufficient funds available to cover all payments to TMC by the due date to avoid these interest charges.
In addition to interest on late payments, Circle K may also impose a $50 fee for any payment rejected due to insufficient funds. This further emphasizes the importance of maintaining adequate funds in the licensee's account to cover all obligations to TMC.