What is the prohibited action for a Circle K franchisee regarding operating another business at the Franchised Location?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
You are prohibited from operating another business, including another royalty-based franchised business with separate point-of-sale equipment, at your Store or at the Franchised Location, unless you obtain our prior written consent. Our consent may be conditioned on your agreement that sales from any such other business will be included in Gross Sales for the purposes of calculating your Royalty and Promotional Fee payments under your Franchise Agreement. Operation of any such other business at your Store or at the Franchised Location without our prior written consent will be a material breach of your Franchise Agreement.
Source: Item 6 — OTHER FEES (FDD pages 22–35)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a franchisee is prohibited from operating another business at the Circle K store or franchised location without prior written consent from Circle K. This includes operating another royalty-based franchised business that uses separate point-of-sale equipment.
If a franchisee operates another business without Circle K's consent, it will be considered a material breach of the Franchise Agreement. However, Circle K's consent may be granted, but it may be conditional. For example, Circle K may require that the sales from the additional business be included in the Gross Sales calculation for royalty and promotional fee payments.
If Circle K approves a separate food service business to be operated from the Circle K store, the franchisee will be required to pay a Co-Branded Royalty Fee as a percentage of the Additional Business's Gross Sales. TMC (likely referring to a parent or affiliated company) may also approve an unaffiliated third-party operator of the Additional Business within the store, subject to terms and conditions established by TMC. In this case, the franchisee must provide a copy of their lease with the third-party operator, and the third-party operator must provide their franchise agreement with the Additional Business franchisor to TMC or enter into an agreement with TMC.