How are royalty fees determined for a Circle K franchise?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
f the Store, despite Franchisee's good faith efforts and due diligence, in which case the Initial Franchise Fee, reduced by all reasonable expenses incurred by Franchisor to date, will be refunded to Franchisee.
- 5.2 Royalty Fees. As set forth in Section 7.6, Franchisor may offer Equipment/Construction Funding if Franchisee qualifies for same. The rate of Franchisee's monthly Royalty Fee that Franchisee is required to pay to Franchisor hereunder (the "Royalty Fee") will be determined based on: (i) the amount of Equipment/Construction Funding Franchisee accepts (if any), (ii) whether the Store is located in a city, municipality, or state that prohibits the collection of royalty fees on the sale of alcoholic beverages and (iii) whether Franchisor allows Franchisee to install gaming machines in the Store.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the monthly royalty fee is determined by several factors. These include the amount of Equipment/Construction Funding the franchisee accepts, whether the store is located in a city, municipality, or state that prohibits the collection of royalty fees on the sale of alcoholic beverages, and whether the franchisor allows the franchisee to install gaming machines in the store.
Based on the level of Equipment/Construction Funding the franchisee accepts, the royalty fee rate will be calculated as detailed in the franchise agreement. The royalty fee rate may be further increased by up to 1.0% if gaming machines are installed. The determined royalty fee rate that the franchisee will be required to pay during the term will be noted on the Data Sheet.
The monthly royalty fee payment that the franchisee will be required to pay will be the greater of $1,000 or the amount calculated as the applicable percentage of Gross Sales, as noted on the Data Sheet. Prospective franchisees should carefully review Schedule A to the Equipment/Construction Funding Agreement and the Data Sheet within the Franchise Agreement to fully understand how their royalty fees will be calculated based on their specific circumstances.