What are the standards a Circle K franchisee must comply with?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
engagement, which shall be governed by a written contract that includes the same restrictions as in Paragraphs (1) – (9) of section 9.6(c) and imposes reasonable confidentiality obligations and privacy and security controls on the Subprocessor.
- 9.7 Ethical Business Conduct. Franchisee agrees to adhere to good business practices, observing high standards of honesty, integrity, fair dealing and ethical business conduct and good faith in all business dealings with customers, vendors, Franchisee's employees, Franchisor's corporate employees, and all other Circle K franchisees. Franchisee must not engage in deceptive, misleading or unethical practices or conduct that may have a negative impact on the reputation and goodwill associated with the Marks.
- 9.8 Crisis Situations. In the interest of protecting the Circle K brand, the Marks and the Business System, Franchisor has the sole and absolute right to determine a response, including what steps will be taken and what communications will be made, in instances of a Crisis, and Franchisee agrees to comply with and implement Franchisor's directions in response to a Crisis. "Crisis" means an event or development that negatively impacts the Circle K brand or the Business System in such a way that Franchisor determines may cause substantial harm or injury to the Marks, the Business System, or the reputation or image of the Circle K brand.
ARTICLE 10 NON-COMPETITION
10.1 Covenant Not to Compete. Franchisee, on behalf of itself, its owners and Affiliates, and the Guarantors: (A) acknowledges that, pursuant to this Agreement, Franchisee's owners, principals or officers, and employees will receive specialized training from Franchisor and access to Franchisor's research and development, trade secrets and other Confidential Information pertaining to the Business System and the operation of Circle K Stores; and (B) agree that they will not, during the Term of this Agreement, on their own account or as an employee, agent, consultant, partner, manager, officer, director, owner or other representative of any other person, firm, partnership, corporation or other entity, own, operate, lease, franchise, conduct, engage in, advise, be connected with, have any interest in, or assist any person or entity engaged in, any other convenience retail business, or other related business that is in any way competitive with or similar to Circle K Stores, that is located within two (2) miles of any Circle K Store, except with the prior written consent of Franchisor.
ARTICLE 11 ELECTRONIC POINT OF SALE SYSTEM; REPORTS, INSPECTIONS AND FINANCIAL STATEMENTS
11.1 EPOS System, Computer Systems and Internet Access. Franchisee shall purchase, install and maintain, at Franchisee's expense, an electronic point-of-sale cash register system, designated by Franchisor that meets standards and specifications established by Franchisor, as modified by Franchisor from time to time in response to business, operations and marketing conditions (the "EPOS System"). In addition to the EPOS System, Franchisee must purchase,
install and maintain, at its expense, a back-office computer system, including without limitation both hardware and software, or other existing or future communication or data storage systems, designated by Franchisor which meet standards and specifications established by Franchisor, as modified by Franchisor from time to time in response to business, operations and marketing conditions (collectively "Computer Systems"). Franchisee must purchase the EPOS System and any required Computer Systems from a source or sources designated by Franchisor. Franchisor has the right to designate a single source from whom Franchisee must purchase the EPOS System or any required Computer Systems, any components thereof or associated service. Franchisee agrees that Franchisor will have full, including electronic, access to Franchisee's EPOS System and any required Computer Systems and the Store-related data and information these systems collect and store at all times, in order for Franchisor to have the ability to monitor Franchisee's daily sales and business activity. Franchisee may not utilize any other payment device or system (in addition to the EPOS System and the Computer Systems) in the operation of the Store without Franchisor's prior written approval. Franchisee also agrees to purchase, install and maintain one or more additional DSL or high-speed lines or other future required communication access device designated exclusively for the EPOS System and any required Computer Systems. Franchisor has the right to designate the specifications of any future required communication access device. Franchisee agrees to transmit daily item level sales data through the Franchisor approved Back Office System on a daily basis via the DSL or high-speed internet line, or other future required communication access device, in accordance with Franchisor's transmission protocol. In addition, Franchisee agrees that at all times Franchisee shall have high speed internet access through an established service provider, maintain an active e-mail account on the internet, and keep Franchisor informed of the e-mail address for such account. Franchisor's proprietary software will be licensed to Franchisee pursuant to the Electronic Point of Sale and Software Agreement attached hereto as Exhibit 2 (the "Software Agreement"), which Franchisee is required to execute, and Franchisee will be required to pay a monthly fee set forth in the Software Agreement. Franchisee will be solely responsible for performing all recordkeeping duties and all such records will be maintained according to the mandatory provisions of the Business Systems Manuals. Franchisor reserves the right to require Franchisee to enter into a separate agreement with a third party designated by Franchisor covering the use and maintenance of the systems required for the Store, including the EPOS System and/or any other Computer Systems or communication software Franchisor deems necessary to operate the Store or to collect data from the Store. Franchisee acknowledges and agrees that it will not be excused from performing any of its obligations hereunder as a result of the failure or malfunction of either the EPOS System or the Computer Systems. It is Franchisee's responsibility to make sure that it is in compliance with all laws that are applicable to the EPOS System or other technology used in the operation of Franchisee's Store, including all data protection, privacy or security laws as well as payment card industry (PCI) and Europay, MasterCard and Visa (EMV) compliance.
Exhibit F - Franchise Agreement 11.2 Participation in Website or Other Online Communication Systems. Franchisor has the right to require Franchisee, at Franchisee's expense, to participate in a "Circle K" extranet website or other online communication systems. Franchisor has the right to determine the content and use of any websites or other online communication systems and will establish the rules under which its franchisees (including Franchisee) will participate. Franchisor will retain all rights relating to any website or other online communication systems and may alter or terminate the site or systems. Franchisee's use of and general conduct on any website or other online communication systems, including on any social media accounts, specifically its use of the Marks, domain names
or any advertising on any website, online communication systems or social media accounts, is subject to the provisions of this Agreement. Franchisee acknowledges that certain information obtained through its participation in the extranet website or other online communication systems may be considered confidential information, including access and identification codes. Franchisee's right to participate in any website or other online communication systems (including social media accounts) or otherwise use the Marks or the Business System on the internet terminates when this Agreement expires or terminates.
- 11.3 Franchisor Access to Data; Reports; Financial Statements. Franchisor will have ownership of, and direct and full access to, all Store-related data and related information by such means as Franchisor may from time to time require, including without limitation, via third party vendors, direct access telephone, data transmission lines, or modem, and Franchisor may use same to the extent permitted by applicable law. Simultaneously with the payment of Royalty Fees hereunder, Franchisee will submit to Franchisor, electronically or otherwise in writing as required by Franchisor, Store sales reports that include an itemization by product/service category as required by Franchisor (e.g., merchandise sales, lottery sales, money order sales, etc.) for sales made during the previous month from the Store, which reports shall include calculation of Gross Sales and Royalty Fees, Co-Branded Fees and Promotional Fees, in such format and with such level of detail as required by Franchisor. In addition, Franchisee is required to provide Franchisor with Franchisee's monthly profit and loss statements in a format prescribed by Franchisor. Such profit and loss statements (which shall include both the relevant month and year-to-date periods) must be submitted to Franchisor within 45 days of each month-end. Additionally, Franchisee is required on a periodic basis to provide to Franchisor financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles or in accordance with the federal income tax basis of accounting. All reporting requirements are more fully set forth in the mandatory provisions of the Business Systems Manuals.
- 11.4 Franchisor's Audit Rights. Within 48 hours after receiving notice from Franchisor, Franchisee will make all of its financial records, books, ledgers, work papers, accounts, bank statements, tax returns, sales tax returns, and other financial information pertaining to the Store (including any Additional Business) (collectively, "Books and Records") available to Franchisor at all reasonable times for review and audit by Franchisor or its designee, and Franchisee will fully cooperate with Franchisor in connection with the audit. Without limiting the foregoing, as part of the audit, Franchisor has the right to evaluate, remotely or at the Store premises, Franchisee's compliance with its obligations regarding Customer Information. The Books and Records for each fiscal year will be kept in a secure place by Franchisee and will be available for audit by Franchisor for at least five (5) years from the termination, expiration, or Transfer of this Agreement. If an audit by Franchisor determines that the actual Gross Sales were understated by Franchisee by more than two percent (2%), then Franchisee will immediately pay to Franchisor any identified deficiency in Royalty Fees, Promotional Fees, or other amounts owed to Franchisor hereunder (plus interest as provided in Section 5.6), and will reimburse Franchisor for all costs and expenses incurred by Franchisor in connection with the audit (including salaries of Franchisor's employees or designees, travel costs, room and board, and audit fees).
- 11.5 Tax Returns. Upon Franchisor's request, Franchisee will provide Franchisor with a true and complete copy of all federal, state, and local sales and income tax returns relating to the
Store (including any Additional Business), and Franchisee hereby waives any privilege pertaining thereto.
- 11.6 Accounting Forms. Franchisee will, at its own expense, use such bookkeeping and recording forms, sales slips, invoices, purchase order forms, reprints, and other miscellaneous operating forms in the operation of the Store as Franchisor may require from time to time.
- 11.7 Delinquent Reports. If Franchisee fails to provide to Franchisor when due any sales, financial statement, or other reports that Franchisee is obligated to provide to Franchisor, and such failure continues for a period of ten (10) days past the due date, (a) Franchisee will pay to Franchisor a late fee with respect to each such report in the amount of Twenty-Five Dollars ($25.00) per day beginning with the eleventh (11) day after the date due and (b) Franchisor may, but is not obligated to, charge Franchisee for such month the Royalty Fees, Co-Branded Fees and Promotional Fees that were due for the most recent month for which the required reports and sales information were submitted. If Franchisee subsequently submits the missing report/sales information, Franchisor shall reconcile the amounts actually collected from Franchisee against amounts owed for the relevant time period and either issue a corresponding credit to Franchisee or charge Franchisee an additional amount. The imposition of late reporting fees will be in addition to, and not in lieu of, any other remedy available to Franchisor for failure to report.
ARTICLE 12 SERVICES PROVIDED BY FRANCHISOR
- 12.1 Franchisor's Services. Consistent with Franchisor's uniformity requirements and quality standards, Franchisor or its authorized representative may, at its sole cost and expense:
- (A) provide Franchisee with a written schedule of all furniture, fixtures, supplies and equipment necessary and required for the operation of the Store, and, upon Franchisee's request, provide Franchisee with recommendations regarding obtaining products, securing vendors, and establishing purchasing, selling, and pricing strategies (Franchisor may, from time to time, make suggestions to Franchisee with regard to pricing policies.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, franchisees must adhere to several standards covering various aspects of the business. These standards are put in place to maintain uniformity, quality, and the integrity of the Circle K brand. Franchisees are expected to maintain ethical business practices, demonstrating honesty and integrity in all dealings with customers, vendors, employees, and other franchisees. In crisis situations, franchisees must comply with Circle K's directions to protect the brand. Franchisees must also follow standards related to building design, store maintenance, and remodeling.
Circle K franchisees are required to be actively involved in the day-to-day operations of their stores, dedicating sufficient management time to uphold Circle K's standards. If a franchisee operates multiple Circle K stores, they must actively supervise the management of each location to ensure consistent adherence to these standards. If the franchisee is not directly managing the store, they must hire a Store Manager who completes Circle K's training program. Store Managers cannot have felony convictions or a history of fraud. Employees must wear approved uniforms to promote the Circle K image.
To maintain uniformity and quality, Circle K franchisees must offer only those products and services specified by Circle K, typically those already offered in corporate-owned stores. Any deviations require written authorization from Circle K. Franchisees must also purchase, install, and maintain an Electronic Point of Sale (EPOS) system and back-office computer systems that meet Circle K's standards. These systems must be updated as required by Circle K to adapt to changing business and marketing conditions.
Circle K requires franchisees to follow the standards set forth in the Business Systems Manuals and other written materials. These manuals include both mandatory standards and recommended guidelines. While franchisees may sometimes use alternative methods to meet the required standards, Circle K retains the right to determine whether these alternatives are suitable. Franchisees must also adhere to a non-compete agreement, preventing them from engaging in any competitive business within two miles of a Circle K store during the term of their agreement, unless they obtain prior written consent from Circle K.