What is the role of the FTC regarding financial performance representations for Circle K?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the FTC's Franchise Rule allows franchisors like Circle K to provide information about the actual or potential financial performance of their franchised and/or company-owned outlets, provided there is a reasonable basis for the information and it is included in the disclosure document. This rule aims to ensure that prospective franchisees have access to reliable financial data to make informed decisions.
However, Circle K states 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 their employees or representatives to make any such representations, either orally or in writing. This means that Circle K is not providing any specific financial performance representations in Item 19 of their FDD.
The FDD does state that if you are purchasing an existing Circle K outlet, the franchisor may provide you with the actual records of that outlet. Furthermore, the document instructs prospective franchisees to report any unauthorized financial performance information or projections they receive to Circle K's management, the Federal Trade Commission, and the appropriate state regulatory agencies. This is to protect potential franchisees from misleading or unsubstantiated claims.