When is the Liquidated Damages fee for purchase of fuel payable by a Circle K franchisee?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Monthly Fee”). | | Type of Fee | Amount | Due Date | Remarks | |---|---|---|---| | Liquidated Damages (Credit Network Agreement) | An amount equal to the lesser of (i) 48 or (ii) the remaining number of months under the term of the agreement, multiplied by $3,000.
Source: Item 6 — OTHER FEES (FDD pages 22–35)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the Liquidated Damages fee related to the purchase of fuel is payable upon the termination of the Motor Fuel Agreement. The amount of this fee is calculated as the greater of $0.04 per gallon multiplied by the minimum monthly volume in motor fuel gallons.
This means that if a Circle K franchisee's Motor Fuel Agreement is terminated, they will owe Circle K a liquidated damages fee. The exact amount will depend on the agreed-upon minimum monthly fuel volume and the $0.04 per gallon calculation.
It is important for prospective franchisees to carefully review the terms of the Motor Fuel Agreement to understand how the minimum monthly volume is determined and what circumstances could lead to termination, triggering this liquidated damages fee. Understanding these terms is crucial for assessing the potential financial obligations associated with the franchise.