Is Circle K required to provide financial performance information in the FDD?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 19: FINANCIAL PERFORMANCE REPRESENTATIONS]
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about the possible performance at a particular location or under particular circumstances.
We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Justin Shelton at 1130 West Warner Road, Tempe, Arizona 85284,
telephone number 602-728-3958, the Federal Trade Commission, and the appropriate state regulatory agencies.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 85–86)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, Circle K is not required to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets. Item 19 clarifies that the FTC's Franchise Rule permits a franchisor to provide this data if they have a reasonable basis for the information and include it in the disclosure document. However, Circle K states explicitly that they do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. They also do not authorize employees or representatives to make such representations, either orally or in writing.
This means that prospective franchisees will not receive any financial performance data in Item 19 regarding potential revenues, income, or profits they might expect to achieve. This is a common practice in franchising; while some franchisors provide detailed financial performance representations, many do not. The absence of this information places a greater burden on the franchisee to conduct their own due diligence and financial forecasting.
However, if a prospective franchisee is purchasing an existing Circle K outlet, the franchisor may provide the actual records of that outlet. If a potential franchisee receives any other financial performance information or projections of future income, they are instructed to report it to Circle K's management, the Federal Trade Commission, and the appropriate state regulatory agencies. This is to protect potential franchisees from unauthorized or misleading financial claims.
Given that Circle K does not provide financial performance representations, it is crucial for potential franchisees to conduct thorough independent research. This includes analyzing market conditions, assessing local competition, and developing a detailed business plan with realistic financial projections. Speaking with current and former franchisees (while being mindful of potential confidentiality agreements) can also provide valuable insights into the financial realities of operating a Circle K franchise.