What is the purpose of the Addendum to the Franchise Agreement for the State of Maryland for Circle K?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
ADDENDUM TO FRANCHISE AGREEMENT FOR THE STATE OF MARYLAND
This Addendum shall pertain to franchises sold in the state of Maryland and shall be for the purpose of complying with Maryland statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement shall be amended as follows:
- The following sentence is added at the end of Article 5.1 of this Agreement:
Based upon our financial condition, the Maryland Securities Commissioner has imposed a fee deferral requirement. Therefore, you will not be required to pay the initial fees due to us and/or our affiliates, including the Initial Franchise Fee and any other fees or costs, until we have completed all our pre-opening obligations to you and you begin operating your franchise business.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the Addendum to the Franchise Agreement for the State of Maryland is included to comply with Maryland statutes and regulations. This addendum specifically addresses the initial fees required to start a Circle K franchise in Maryland.
The addendum states that, due to the franchisor's financial condition, the Maryland Securities Commissioner has imposed a fee deferral requirement. As a result, Maryland franchisees are not required to pay initial fees, including the Initial Franchise Fee and any other costs, until Circle K has completed all pre-opening obligations and the franchisee begins operating their Circle K franchise business.
This addendum provides a benefit to prospective Circle K franchisees in Maryland by deferring the initial financial burden. Instead of paying upfront, franchisees can delay payment until the business is ready to open and generate revenue. This could significantly lower the initial investment needed and reduce the financial risk for new franchisees in Maryland. Franchisees should confirm with Circle K the specific pre-opening obligations that must be met before the initial fees become due.