What is the 'Total Forgiven Amount' in the context of the Circle K Conversion/Improvement Amount?

According to Circle K's 2025 Franchise Disclosure Document, the 'Total Forgiven Amount' refers to the cumulative amount of the Conversion/Improvement Amount principal and any accrued interest that Circle K forgives at a specific point in time, as outlined in the Amortization Schedule of the Incentive Amounts Schedule. This forgiveness occurs annually. The forgiven amount reduces the principal balance of the Conversion/Improvement Amount, which in turn affects how future accrued interest is calculated.

In simpler terms, Circle K may provide a loan to a purchaser for conversion or improvements to the premises. This loan, along with any interest, is forgiven annually based on a schedule. The 'Total Forgiven Amount' is the sum of all principal and interest forgiven up to that point. This forgiveness reduces the amount the purchaser owes on the loan.

However, this forgiveness is not unconditional. If certain events occur, such as the purchaser failing to comply with agreements, discontinuing motor fuel marketing, or debranding the premises, Circle K can cease the forgiveness. These events are termed 'Acceleration Events.' Upon such an event, the remaining unforgiven amount ('Total Unforgiven Repayment') becomes immediately due. The 'Total Forgiven Amount' up to the Acceleration Date remains forgiven, but no further amounts will be forgiven after that date.

Therefore, a prospective Circle K franchisee should carefully review the Amortization Schedule to understand the rate at which the Conversion/Improvement Amount is forgiven. They should also be aware of the conditions that could trigger an 'Acceleration Event,' causing the remaining loan balance to become immediately due. Understanding these terms is crucial for managing the financial obligations associated with the Conversion/Improvement Amount.