What is the required notice period if Circle K modifies the Competitive Allowance amount?

According to Circle K's 2025 Franchise Disclosure Document, Circle K, as the seller, has the right to modify the Competitive Allowance amount or terminate the obligation to make further payments. To do so, Circle K must provide the purchaser, or franchisee, with thirty (30) days' prior written notice. This modification or termination can occur at any time at Circle K's sole discretion, without incurring any liability to the franchisee.

This stipulation is important for prospective Circle K franchisees because it means that the Competitive Allowance, which affects the franchisee's revenue from motor fuel sales, is not guaranteed. Circle K can change or eliminate this allowance with only 30 days' notice, impacting the franchisee's profitability. The FDD also states that if the Motor Fuel Agreement or the franchise agreement is terminated or not renewed, the Competitive Allowance will immediately terminate without notice.

Franchisees should carefully consider this clause and its potential impact on their financial projections. It is essential to understand the conditions under which Circle K might modify or terminate the Competitive Allowance and to assess the potential financial risks associated with such changes. Prospective franchisees may want to discuss this provision with existing Circle K franchisees to understand how the Competitive Allowance has been managed in practice and what factors might trigger a change.