Under what condition is the Circle K Franchise Agreement not binding on the Franchisor?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the Franchise Agreement is subject to immediate termination, and thus not binding on the franchisor, if the franchisee refuses to sign the Circle K Business Franchise Agreement after Circle K elects to exercise the Right of First Refusal.
In this scenario, if Circle K decides to match an offer the franchisee has received to sell their business, the franchisee is then required to sign Circle K's standard franchise agreement. This new agreement may contain different terms and conditions than the original agreement, except that the pricing and term of fuel supply should not be materially different.
If the franchisee refuses to sign this new Circle K Business Franchise Agreement, the original agreement is immediately terminated. The franchisee is then obligated to fulfill all post-termination requirements, including paying liquidated damages and the unamortized portion of any funding provided by Circle K.