What obligations does the Assignee assume when taking over a Circle K license?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) This Agreement is personal to Licensee. Licensee's interest in this Agreement shall not be transferred or assigned by Licensee in whole or in part, directly or indirectly, without the prior written consent of TMC and provided the following conditions are satisfied: (i) new Licensee ("Assignee") meets TMC's qualifications, (ii) Assignee signs TMC's current form of branding agreement, (iii) Assignee assumes all obligations under this Agreement, (iv) the CIRCLE K convenience store located at the Premises is also transferred to Assignee in accordance with the assignment conditions set forth in Licensee's Franchise Agreement, (v) any Sublicense Agreements entered into in connection with this Agreement are also transferred to Assignee, (vi) all amounts due TMC are paid in full, and (vii) release signed by Licensee.
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 seeks to assign their agreement to a new licensee (the Assignee), the Assignee must assume all obligations under the existing agreement. This means the new licensee steps into the shoes of the previous licensee and is responsible for fulfilling all the terms and conditions outlined in the original Circle K Branding Agreement.
Specifically, the Assignee must meet Circle K's qualifications for new licensees, sign Circle K's current branding agreement form, and ensure the Circle K convenience store at the premises is also transferred in accordance with the franchise agreement's assignment conditions. Additionally, any sublicense agreements connected to the branding agreement must also be transferred to the Assignee. All outstanding amounts owed to TMC Franchise Corporation must be paid in full, and the original licensee must sign a release.
This requirement ensures that Circle K maintains consistent standards and operational practices across all its branded locations, even when ownership changes. For a prospective franchisee, this means carefully reviewing the existing franchise agreement and understanding all the responsibilities and liabilities they will be taking on before agreeing to the assignment. It also highlights the importance of ensuring that all financial obligations are settled and that the transfer aligns with Circle K's requirements to avoid potential complications.