How are partial prepayments of Fundings applied to the deemed reductions for a Circle K franchise?

According to Circle K's 2025 Franchise Disclosure Document, franchisees have the option to prepay their funding in part or in full. Any partial prepayment made by a Circle K franchisee will be applied to the deemed reductions of the fundings in the inverse order of maturity. This means that the prepayment will first be applied to the last scheduled reduction, then the second to last, and so on, until the prepayment amount is exhausted.

It's important to note that these prepayments will not reduce the amount of any Royalty Fees payable under the Franchise Agreement, including the rate at which such Royalty Fees are determined. Therefore, while prepaying the funding can reduce the outstanding balance, it does not affect the ongoing royalty obligations to Circle K.

This prepayment option provides Circle K franchisees with some flexibility in managing their debt obligations. By making partial prepayments, franchisees can potentially reduce their outstanding balance more quickly, which could be beneficial in the long run. However, franchisees should carefully consider their financial situation and consult with a financial advisor before making any prepayments, as it may not always be the most advantageous strategy.