Under what circumstances can the Circle K agreement be terminated immediately?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
terially different. If Franchisor elects not to exercise the Right of First Refusal, Franchisee's acceptance of a More Favorable Offer or Bona Fide Offer will be subject to Franchisor's prior written approval of the brand of fuel to be offered at the Franchised Location. If Franchisor elects to exercise the Right of First Refusal but Franchisee refuses to sign the Circle K Business Franchise Agreement, this Agreement will be subject to immediate termination and, if terminated, Franchisee will be required to comply with all of the post-termination obligations hereunder, including but not limited to the payment of liquidated damages as well as the unamortized portion of any funding provided by Franchisor.
ARTICLE 9 CONFIDENTIAL BUSINESS SYSTEMS MANUALS AND OTHER INFORMATION
- 9.1 Compliance with Business Systems Manuals. Franchisor will provide Franchisee with one copy of Franchisor's business systems manuals, including but not limited to the Store Guides and Operations and Reference Manuals (collectively, the "Business Systems Manuals"), either electronically, on the Circle K franchise extranet or in hard copy format, which must be available at all times at the Store, and, if in hard copy format, returned by Franchisee to Franchisor upon expiration or termination of this Agreement. To protect the reputation and goodwill of Franchisor, and to maintain uniform operating standards under the Business System, Franchisee will at all times during the Term conduct business at the Store in accordance with the mandatory provisions of the Business Systems Manuals.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, there are several circumstances that could lead to the immediate termination of the franchise agreement. One such instance arises if Circle K elects to exercise its Right of First Refusal but the franchisee refuses to sign the Circle K Business Franchise Agreement. In this case, the original agreement is subject to immediate termination, and the franchisee must adhere to all post-termination obligations, including the payment of liquidated damages and the unamortized portion of any funding provided by Circle K.
Another cause for immediate termination occurs if the franchisee fails to open a Conversion Store within one year or a New Store within two years from the effective date of the agreement. This failure entitles Circle K to immediately terminate the agreement without incurring any liability. Should this happen, the franchisee is obligated to fulfill all post-termination duties, including the payment of liquidated damages.
Additionally, the Credit Network Agreement between TMC Franchise Corporation and the franchisee ('Purchaser') states that the agreement shall terminate immediately if the Underlying Agreement is terminated, expires, or is not renewed. Furthermore, if the lease is terminated due to a default by the franchisee, it will constitute a breach of the franchise agreement and all other related agreements, potentially leading to immediate termination. These provisions highlight the importance of adhering to the terms of all related agreements and maintaining compliance with the lease to avoid immediate termination and its associated financial repercussions.