Can Circle K require franchisees to participate in special promotional arrangements negotiated with suppliers?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
We may also periodically negotiate special promotional arrangements with suppliers for the benefit of the system, and you may be required to participate in the promotions designated by us. We may receive certain items or amounts of money from vendors as consideration for participating in national promotions based upon their terms. We may distribute any monies or items received from participating in national promotions on the suppliers' terms to participating franchisees in accordance with national marketing programs that you may enroll in from time to time. We may also use national promotions to create and develop national advertising strategies designed to promote the Circle K brand. Monies to be received by us or suppliers from national promotions will be negotiated and will vary depending upon the type of promotion and supplier involved. Not all promotions that may be available to company-operated Circle K Stores will be available to franchised 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 periodically negotiate special promotional arrangements with suppliers for the benefit of the franchise system. As a franchisee, you may be required to participate in these designated promotions. Circle K may receive items or money from vendors for participating in national promotions, and these may be distributed to franchisees enrolled in national marketing programs, according to the suppliers' terms. These national promotions can also be used to develop national advertising strategies for the Circle K brand. The specific amounts received by Circle K or suppliers will vary depending on the promotion and supplier involved. However, not all promotions available to company-operated Circle K stores will be available to franchised Circle K stores.
Circle K also negotiates purchase arrangements with certain suppliers and service providers for the benefit of franchisees. Access to these suppliers isn't guaranteed, and they may be unable or unwilling to deliver products to your store. Circle K may receive consideration, such as discounts, rebates, or marketing allowances, on franchisee purchases from these suppliers. Circle K may keep this consideration, use it to fund advertising and promotions, or distribute it to franchisees as deemed appropriate.
Circle K designates primary sources of supply for merchandise, goods, and services, which may include Circle K itself or its affiliates, depending on the location. Approved primary suppliers typically provide about 50% of the merchandise recommended for sale at Circle K stores, and franchisees must purchase this merchandise from the primary supplier serving their region. This merchandise includes items like groceries, candy, cigarettes, tobacco, proprietary items, and food service items. The remaining merchandise, such as beverages, periodicals, baked goods, snack items, and dairy products, is usually delivered directly from the product manufacturer or distributor. The use of designated primary sources and recommended vendors may facilitate advertising and promotional allowances. From time to time, Circle K may have preferred vendors for fountain drinks, and franchisee participation may be required to receive rebates and fountain equipment reimbursements and to ensure consistent product availability across all Circle K stores.