What is a 'Third-Party Fuel Offer' in the context of a Circle K franchise?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
If at the time you enter into a Franchise Agreement with us, you are subject to a third-party fuel supply arrangement to sell at the Franchised Location third-party motor fuel, we will have a right (but not an obligation) to begin supplying Circle K branded fuel to you upon expiration of the third-party fuel supply arrangement (the "Franchisor Fuel Supply Right"). You will be required to provide written notice of the third-party fuel supply arrangement's expiration (the "Expiration Notice") to us at least six months prior to
the expiration of such third-party fuel arrangement (the date of such Expiration Notice, the "Notice Date"). If, prior to the Notice Date, you have secured a new bona fide written offer from a reputable third-party fuel supplier setting forth fuel supply terms for the Franchised Location that are binding on the offeror (a "Third-Party Fuel Offer"), you will be required to provide to us a copy of the Third-Party Fuel Offer (including related documentation) together with the Expiration Notice.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 10–16)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a 'Third-Party Fuel Offer' is a written offer from a fuel supplier, other than Circle K, that a franchisee obtains before their existing fuel supply agreement expires. This offer must include specific fuel supply terms that would be binding if accepted. The franchisee must provide Circle K with a copy of this offer, along with notice of their current fuel agreement's expiration date. This allows Circle K to decide whether to exercise its right to become the fuel supplier upon the existing agreement's end.
If a Circle K franchisee has a third-party fuel supply arrangement when they initially sign their franchise agreement, Circle K has the option to become the fuel supplier when that arrangement expires. To facilitate this, the franchisee must notify Circle K of the expiration at least six months in advance. If the franchisee secures a 'Third-Party Fuel Offer' before this notification date, they must provide Circle K with a copy of the offer along with the expiration notice.
Circle K then has the option to either match the terms of the 'Third-Party Fuel Offer' or decline to supply fuel. If Circle K chooses to supply fuel, the Motor Fuel Supply Agreement will be revised to include substantially the same price and delivery terms as the Third-Party Fuel Offer. However, if Circle K declines, the franchisee can accept the Third-Party Fuel Offer, subject to Circle K's approval of the fuel brand. If Circle K elects to exercise its Franchisor Fuel Supply Right, the franchisee must sign the Circle K Business Franchise Agreement and related agreements. Refusal to do so can result in termination of the Franchise Agreement and associated penalties, including liquidated damages.