What are the required actions that a Circle K licensee must take to transfer their agreement to an assignee?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) This Agreement is personal to Licensee. Licensee's interest in this Agreement shall not be transferred or assigned by Licensee in whole or in part, directly or indirectly, without the prior written consent of TMC and provided the following conditions are satisfied: (i) new Licensee ("Assignee") meets TMC's qualifications, (ii) Assignee signs TMC's current form of branding agreement, (iii) Assignee assumes all obligations under this Agreement, (iv) the CIRCLE K convenience store located at the Premises is also transferred to Assignee in accordance with the assignment conditions set forth in Licensee's Franchise Agreement, (v) any Sublicense Agreements entered into in connection with this Agreement are also transferred to Assignee, (vi) all amounts due TMC are paid in full, and (vii) release signed by Licensee.
- (b) Subparagraph (a) above applies if any change in the control of the Licensee occurs including, without limitation, the sale, conveyance, alienation, transfer or other change of interest in, or title to, or beneficial ownership of, any voting stock, membership interest, or partnership interest, of or in the Licensee, whether voluntarily, involuntarily, by operation of law, merger or otherwise. A "change in the control" of Licensee shall be deemed to occur whenever a
party gains the ability to influence the business and affairs of Licensee directly or indirectly. A party who owns, or otherwise possesses, twenty-five percent (25%), or more, of the voting stock, membership interest, partnership interest, or beneficial interest shall be deemed to have such ability.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a licensee's interest in the Branding Agreement is personal and cannot be transferred without Circle K's prior written consent. To obtain this consent and successfully transfer the agreement, several conditions must be met. First, the new licensee, referred to as the "Assignee," must meet Circle K's qualifications for new licensees. This ensures that the new operator is capable of maintaining Circle K's standards. Second, the Assignee must sign Circle K's current form of branding agreement, indicating their commitment to the brand's terms and conditions.
Additionally, the Assignee must assume all obligations under the existing Branding Agreement, taking on the responsibilities and liabilities of the original licensee. The Circle K convenience store located at the premises must also be transferred to the Assignee, following the assignment conditions outlined in the licensee's Franchise Agreement. Any Sublicense Agreements connected to the Branding Agreement must also be transferred to the Assignee, ensuring a complete transfer of operational rights.
Furthermore, all outstanding amounts due to TMC Franchise Corporation must be paid in full before the transfer can be completed, ensuring that Circle K receives all owed payments. Finally, the original licensee must sign a release, relinquishing their rights and responsibilities under the agreement. These conditions collectively aim to protect Circle K's interests and maintain the integrity of its brand standards during the transfer process.
It's also important to note that these conditions apply not only to direct transfers but also to any change in the control of the licensee, including changes in ownership of voting stock, membership interest, or partnership interest, if a party gains the ability to influence the business and affairs of Licensee directly or indirectly. A party who owns, or otherwise possesses, twenty-five percent (25%), or more, of the voting stock, membership interest, partnership interest, or beneficial interest shall be deemed to have such ability.