What is the 'Total Forgiven Amount' referring to in the Circle K franchise agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
The aggregate amount of Conversion/Improvement Amount principal and interest accrued thereon that is forgiven pursuant to this subparagraph (b) at any particular time is hereinafter referred to as the "Total Forgiven Amount."
- (c) Notwithstanding anything to the contrary contained herein, in the event (i) Purchaser fails to comply with any provision of this Agreement, the Motor Fuel Agreement, or any related agreement, note, contract, or instrument between the parties or in favor of Seller; (ii) the Purchaser discontinues actively marketing motor fuel at the Premises; (iii) Purchaser begins selling motor fuel at the Premises under trade names or trademarks or other brand identification other than those permissible under the Motor Fuel Agreement; (iv) Purchaser fails to comply with the image, appearance, or operational standards at the Premises set forth by Seller, including the Image Standards, which standards may from time to time be amended or modified; (v) there ceases to be a Motor Fuel Agreement in effect between Seller and Purchaser for any reason whatsoever including, without limitation, by mutual consent; (vi) Purchaser assigns or transfers its rights or interests, or any portion thereof, in this Agreement, the Motor Fuel Agreement, Purchaser's ownership interest in or Purchaser's lease of the Premises; (vii) if the Premises is debranded for any reason whatsoever; (viii) any representation, statement or warranty made by Purchaser to Seller in this Agreement or in connection with negotiations related to this Agreement, or in any certificate, financial statement or document delivered pursuant to this Agreement proves to be incorrect, untrue or misleading in any material respect when made or deemed made; (ix) Purchaser becomes insolvent, or admits its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors, or applies for or is subject to the appointment of a receiver or trustee for it or a substantial part of its property or business, or initiates bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief under any bankruptcy law, or any such proceedings are initiated against Purchaser; or (x) any order, judgment or decree is entered against Purchaser decreeing its dissolution, or Purchaser's existence is otherwise terminated (any such aforementioned event is hereinafter referred to as an
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the 'Total Forgiven Amount' refers to the aggregate amount of Conversion/Improvement Amount principal and interest that is forgiven according to the terms outlined in the agreement. This amount is forgiven at a specific time, as detailed in the agreement.
However, the agreement also stipulates conditions under which this forgiveness may not occur. If the purchaser, meaning the franchisee, fails to comply with any provision of the agreement, the Motor Fuel Agreement, or any related agreement, note, contract, or instrument, the forgiveness may be voided. Other conditions include discontinuing active marketing of motor fuel at the premises, selling motor fuel under unapproved trade names, failing to meet image or operational standards, termination of the Motor Fuel Agreement, assignment or transfer of rights or interests, debranding of the premises, incorrect or misleading representations, insolvency, or dissolution.
These conditions highlight the importance of adhering to all contractual obligations and maintaining specific operational standards to ensure the 'Total Forgiven Amount' is indeed forgiven. Prospective Circle K franchisees should carefully review these conditions and understand their implications to avoid potential financial repercussions.