What is the range of the Security Deposit required for a Circle K Motor Fuel Business?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
ed in Item 7.
Motor Fuel Business
In connection with signing the Security Deposit Agreement (the "Security Agreement"), attached as Exhibit 1 to the Motor Fuel Agreement, you will pay us a Security Deposit in an amount ranging from $20,000 to $50,000. The Security Deposit you will be required to pay will depend on a number of factors, including the geographic region in which your franchise is located.
The Security Deposit will be deposited into a non-interest-bearing account (the "Security Deposit Account").
The Security Deposit is paid to secure your payment of all monies due under, and performance and observance of all the terms, covenants and conditions contained in the Motor Fuel Agreement. If you fail to timely pay any amount due and owing under the Motor Fuel Agreement, we may draw upon the Security Deposit and apply the funds toward the payment of an amount due and owing to us. If we draw upon the Security Deposit, you must immediately pay us an amount sufficient to restore the Security Deposit to its prior level.
Upon termination, expiration or non-renewal of the Motor Fuel Agreement, we may also draw upon the Security Deposit to satisfy any past due amounts, loss, damage, injury or liability caused by your failure to perform any condition, covenant or term of or make any payment under the Motor Fuel Agreement. Any remaining balance of the Security Deposit Account will then be refunded to you.
If the premises where your Motor Fuel Business is located are owned by us or our affiliate, we may reduce or waive the amount of Security Deposit you are re
Source: Item 5 — INITIAL FEES (FDD pages 20–22)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, franchisees entering into a Motor Fuel Agreement must provide a security deposit ranging from $20,000 to $50,000. The specific amount required depends on factors such as the geographic location of the franchise. This security deposit is formalized through a Security Deposit Agreement, which is included as an exhibit to the Motor Fuel Agreement.
The security deposit is held in a non-interest-bearing account and serves to protect Circle K against potential financial losses resulting from the franchisee's failure to meet their obligations under the Motor Fuel Agreement. Circle K can draw upon this deposit to cover any unpaid amounts or damages caused by the franchisee's non-compliance with the agreement's terms. If Circle K uses any portion of the security deposit, the franchisee is required to immediately replenish the deposit to its original level.
Upon termination, expiration, or non-renewal of the Motor Fuel Agreement, Circle K may use the security deposit to cover any outstanding dues, losses, damages, injuries, or liabilities resulting from the franchisee's failure to adhere to the agreement. After settling any such claims, the remaining balance of the security deposit will be refunded to the franchisee. However, if Circle K or its affiliate owns the premises where the Motor Fuel Business is located, Circle K has the option to reduce or waive the security deposit requirement.