What is the process for a Circle K franchisee to request an annual accounting of the Promotional Fees?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the final decision-making authority over all matters relating to the Promotional Fees collected and expended. We currently establish promotional programs for the promotion of the Circle K system and products. Our marketing department is responsible for category development, as well as the development of the promotional programs, which includes the production, research, and administration of advertising, marketing calendars, production of television, radio, newspaper, direct mail, and point of purchase advertising, grand opening activities for new Store openings and all collateral materials. Upon written request, we will provide you with an annual unaudited accounting of the total amount of Promotional Fees collected and the total costs incurred by us. Our possession and custody of funds as Promotional Fees from you and other franchisees shall not be construed as making us a fiduciary with respect to the collection or expenditure of such funds, and any Promotional Fees will not be held in a trust or escrow account. In addition to Promotional Fees from franchisees, our affiliate Circle K Stores Inc. and outside vendors and suppliers may contribute monies to various promotional programs, although the company-operated Circle K Stores are not required to contribute on the same basis. We are not obligated to spend the Promotional Fees collected in any particular market nor are we obligated to spend all of the Promotional Fees collected in any fiscal year. We cannot guaranty that you will benefit directly or pro rata from the Promotional Fund, and allocations from the Promotional Fund may benefit other franchise or company-owned Stores disproportionately to your Store. If our costs for a fiscal year for the advertising and promotions described above exceed or fall short of the Promotional Fees collected for a fiscal year, we may, at our option, carry the excess or shortfall to the next fiscal year. We may use a portion of the Promotional Fees to solicit new franchise sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 60–72)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a franchisee can obtain an annual accounting of the Promotional Fees. To do so, the franchisee must submit a written request to Circle K. In response, Circle K will provide an unaudited accounting of the total Promotional Fees collected and the total costs incurred.
It is important to note that Circle K has final decision-making authority over all matters related to Promotional Fees. The funds are used to promote the Circle K system and products through various marketing efforts, including advertising, promotional programs, and grand opening activities. These fees are not held in a trust or escrow account, and Circle K is not obligated to spend the fees in any particular market or fiscal year.
Prospective franchisees should understand that Circle K does not guarantee direct or pro rata benefits from the Promotional Fund. Allocations may disproportionately benefit other franchise or company-owned stores. If advertising and promotion costs exceed or fall short of the collected Promotional Fees in a given fiscal year, Circle K may carry the excess or shortfall to the next fiscal year. Additionally, Circle K may use a portion of the Promotional Fees to solicit new franchise sales.