Which items in the Circle K Disclosure Document relate to the franchisee's opening obligations?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in Agreement | Disclosure Document Item |
|---|---|---|
| e. Opening | Sections 2.1 & 6.2 of Convenience Store Franchise Agreement | Items 7 & 11 |
2.1 Non-Exclusive License; Franchised Location; Store Opening. Subject to the terms and conditions herein, Franchisor hereby grants to Franchisee, and Franchisee hereby accepts, a non-exclusive license to establish and operate, during the Term, a Circle K Store, in conformity with the Business System, using the Marks (the "License"), at the location described in the Data Sheet attached hereto as Exhibit 1 (the "Franchised Location"). Franchisee agrees that the Store shall be constructed in accordance with the requirements of this Agreement and should be ready
to open within: (i) 1 year after the Effective Date, if the Store is a Conversion Store; or (ii) 2 years after the Effective Date, if the Store is a New Store. A failure to open a Conversion Store within one year or a New Store within two years will entitle Franchisor to immediately terminate this Agreement without Franchisor incurring any liability for such termination. If this Agreement is so terminated, Franchisee must comply with all post-termination obligations set forth herein, including but not limited to the payment of Liquidated Damages.
6.2 Grand Opening.
Unless exempted by Franchisor, Franchisee will conduct a grand opening advertising and promotional campaign in connection with the opening of the Store within one hundred (100) days of the date that Franchisee begins conducting business at the Store hereunder.
Franchisor will reasonably assist Franchisee with developing and carrying out such grand opening campaign and will furnish Franchisee with a grand opening materials package.
All grand opening activities and related publicity and promotional materials must receive Franchisor's prior written approval.
All publicity and promotional costs including the full cost of any price reductions and other customer inducements incurred in such grand opening advertising campaign will be at the sole expense of Franchisee, which expense will be in addition to Franchisee's obligation to pay the Promotional Fees as set forth above; provided, however, that Franchisor will reimburse Franchisee (from the Local and Regional Promotional Fees) any pre-approved expenditures in the amount of $.50 for each $1.00 Franchisee spends, up to a maximum reimbursement of $4,000.
A Branded Business typically opens within 30 to 180 days after a Branding Agreement is signed. The factors that affect this time period are delayed installation of equipment, fixtures, and signs.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 53–55)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, several items outline the franchisee's obligations when opening a Circle K store. Item 9 of the FDD provides a comprehensive overview of franchisee obligations, linking each obligation to specific sections within the franchise agreement and relevant disclosure document items. For the specific obligation of 'Opening', the relevant sections in the Convenience Store Franchise Agreement are Sections 2.1 & 6.2, which correspond to Items 7 & 11 in the Disclosure Document. This indicates that Items 7 and 11 contain information pertinent to the franchisee's responsibilities during the store opening phase.
Item 22 further details aspects of the store opening. Franchisees are granted a non-exclusive license to operate a Circle K store at a specific location, with the agreement specifying timelines for opening. Conversion Stores should be ready to open within one year of the Effective Date, while New Stores have a two-year window. Failure to meet these deadlines can result in the termination of the franchise agreement, with the franchisee liable for post-termination obligations, including liquidated damages. This underscores the importance of adhering to the stipulated opening timelines.
Additionally, Item 22 addresses the grand opening. Unless exempted by Circle K, franchisees must conduct a grand opening advertising and promotional campaign within 100 days of commencing business. While Circle K will assist in developing the campaign and provide materials, the franchisee bears the costs, although there is a potential reimbursement of $0.50 for each $1.00 spent, up to a maximum of $4,000, from the Local and Regional Promotional Fees for pre-approved expenditures. This highlights the franchisee's responsibility for the financial investment in the grand opening, alongside adherence to Circle K's standards and approval processes for promotional activities.
Item 11 also mentions that a Branded Business typically opens within 30 to 180 days after signing the Branding Agreement, with potential delays due to equipment, fixture, and sign installations. This provides a general timeframe for opening a Branded Business and acknowledges factors that could affect the opening timeline. Prospective franchisees should carefully review Items 7, 11, and 22 of the FDD, along with the referenced sections of the franchise agreements, to fully understand their obligations and the franchisor's expectations regarding the store opening process.