Under what circumstances does Circle K charge Liquidated Damages related to the purchase of fuel?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Monthly Fee”). | | Type of Fee | Amount | Due Date | Remarks | |---|---|---|---| | Liquidated Damages (Credit Network Agreement) | An amount equal to the lesser of (i) 48 or (ii) the remaining number of months under the term of the agreement, multiplied by $3,000.
Source: Item 6 — OTHER FEES (FDD pages 22–35)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, liquidated damages related to fuel purchases are charged upon the termination of the Motor Fuel Agreement. The amount of these damages is calculated as the greater of (i) $0.04 per gallon multiplied by the minimum monthly volume in motor fuel gallons set forth in the Motor Fuel Agreement.
For a prospective Circle K franchisee, this means that if the Motor Fuel Agreement is terminated, they will be required to pay liquidated damages. The exact amount will depend on the minimum monthly volume of fuel they were obligated to purchase under the agreement, multiplied by $0.04 per gallon.
This fee is designed to compensate Circle K for the franchisee's failure to meet their fuel purchase obligations. Franchisees should carefully review the terms of the Motor Fuel Agreement to understand their minimum purchase requirements and the potential cost of terminating the agreement.