For a Circle K motor fuel conversion, when is the fuel security deposit due?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Real Estate (Note 1) | (Note 1) | (Note 1) | (Note 1) | (Note 1) |
| Construction, Remodeling, and Leasehold Improvements (Note 2) | $1,200,000 - $3,800,000 | As Billed | As Incurred | Contractors, Suppliers or Other Third Parties |
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
| Other Site Development Costs (Note 2) | $135,000 - $250,000 | As Billed | As Incurred | Architects, Engineers and Other Third Parties |
| Equipment (Note 3) | $500,000 - $1,200,000 | As Billed | As Incurred | Suppliers |
| EPOS and Computer | $51,000 - | As Incurred | As Incurred | Suppliers |
| Systems | $65,000 | |||
| Network Fee (3 months) | $150 | EFT Draft | Monthly | TMC |
| (Note 4) | ||||
| Signs (Note 5) | $50,000 – $120,000 | As Billed | As Incurred | Suppliers |
| Security Deposits and | (Note 6) | (Note 6) | (Note 6) | (Note 6) |
| Licenses and Permits | ||||
| (Note 6) | ||||
| Utility Deposits (Note 7) | (Note 7) | (Note 7) | (Note 7) | (Note 7) |
| Inventory (Note 8) | $40,000 - $120,000 | EFT Draft | Upon delivery | TMC |
| Insurance (Note 9) | $3,000-$12,000 | As Billed | As required by Insurance Carrier or Provider | Insurance Carrier |
| Fuel Security Deposit | $20,000 - | Lump Sum | Upon signing Motor | TMC |
| (Note 10) | $50,000 | Fuel Agreement | ||
| TOTAL | $1,999,150 - | |||
| (Note 11) | $5,367,150 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 36–45)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the fuel security deposit, ranging from $20,000 to $50,000, is due upon signing the Motor Fuel Agreement. This deposit is a lump sum payment made to TMC, Circle K's parent company.
The security deposit ensures that the franchisee fulfills their payment obligations and adheres to the terms outlined in the Motor Fuel Agreement. If a franchisee fails to make timely payments, Circle K has the right to draw from the security deposit to cover the outstanding amount. Should Circle K utilize any portion of the deposit, the franchisee is obligated to immediately replenish the deposit to its original level.
Upon the termination, expiration, or non-renewal of the Motor Fuel Agreement, Circle K may use the security deposit to settle any outstanding dues, cover losses, damages, injuries, or liabilities resulting from the franchisee's failure to meet the agreement's conditions. After settling all applicable charges, the remaining balance of the security deposit will be refunded to the franchisee. However, Circle K may reduce or waive the security deposit if they or their affiliate owns the premises where the Motor Fuel Business operates.