Does Circle K receive consideration from suppliers and service providers based on franchisee purchases?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
r than the companies just identified, no officers own an interest in our convenience store suppliers.
Periodically, we may negotiate purchase arrangements with certain suppliers and service providers for our benefit and/or the benefit of convenience store franchisees. However, access to such suppliers and service providers is not guaranteed, and it is possible that such suppliers and service providers will be unable or unwilling to deliver products to your store. Periodically, we may also receive consideration in the form of discounts, rebates, or marketing allowances on purchases that you make from these suppliers and service providers for services rendered, products purchased or rights licensed. We may keep such consideration we receive from these suppliers or service providers, or we may fund costs associated with advertising and promotions, or we may distribute such allowances to you in such amounts and allocation methods as we deem appropriate. We may designate a primary source or sources of supply for merchandise, goods, and services, and depending on geography that may be us or any of our affiliates. As of the date of this Disclosure Document, the primary suppliers have agreed to make the merchandise and products they carry, and the services they provide to Circle K Stores, available to TMC's franchisees. Our approved primary suppliers typically deliver approximately 50% of the merchandise recommended for sale at Circle K Stores, and you must purchase this merchandise from the primary supplier that serves the region in which your Store is located. The merchandise purchased from the primary suppliers includes grocery, candy, cigarettes, tobacco, proprietary items, food service items and supplies. The balance of the merchandise such as beverages, periodicals, baked goods, snack items and dairy products is received by direct delivery from the product manufacturer or distributor. Use of our designated primary source and other recommended vendors may facilitate the payment of advertising and promotional allowances. From time to time, we have one or more preferred vendors for fountain drinks and your participation will be required in order for you to receive rebates and fountain equipment reimbursements available from fountain vendors and to provide for consistent product availability at all Circle K Stores.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 45–52)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, Circle K may negotiate purchase arrangements with certain suppliers and service providers for the benefit of both Circle K and its franchisees. Circle K may also receive consideration from these suppliers in the form of discounts, rebates, or marketing allowances based on franchisee purchases.
Circle K has the discretion to either retain this consideration, use it to fund advertising and promotions, or distribute it to franchisees. The FDD specifies that during the year ended April 27, 2025, Circle K derived revenue of $3,819,203, which is 5.35% of their total revenue of $71,167,087, from required purchases or leases by convenience store franchisees. However, Circle K and its affiliates are not currently approved or required suppliers of products or services for franchisees, though they reserve the right to become providers in the future.
Franchisees may also receive rebates, with company-operated Circle K stores receiving rebates that averaged approximately 10.2% (including cigarette rebates) of merchandise sales from participating vendors during the year ended April 27, 2025. Excluding cigarette rebates, the average was approximately 5.4%. The actual benefit a franchisee receives depends on their compliance with vendor program requirements and their level of purchases from vendors offering rebates. Franchisees should also be aware that they may not be eligible for all discounts and rebates that company-operated stores receive.