Under what conditions will a Circle K franchisee be required to surrender possession of the franchised location to the franchisor or its designee?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (E) if Franchisor exercises (in its sole discretion) its purchase right under Section 16.1 or if Franchisor is the lessor under the Lease, then, upon request by Franchisor, peaceably surrender possession, occupancy, control and use of the Franchised Location to Franchisor or its designee.
Franchisee will, at the request of Franchisor, promptly execute assignments or other transfer documentation in the form requested by Franchisor to perfect the transfer to Franchisor or its designee of Franchisee's interest in or to the right to use and occupy the Franchised Location.
The assumption of possession, occupancy and control of the Franchised Location by Franchisor (or its designee) will not relieve Franchisee of any outstanding unpaid obligations that may have accrued prior to the time of assumption of control by Franchisor (or its designee); all such obligations will remain the obligations of Franchisee.
If Franchisor elects not to assume possession and control of the Franchised Location, Franchisee will, at Franchisee's expense, make such modifications or alterations thereto immediately upon termination or expiration of this Agreement as Franchisor may demand to prevent the operation of any business therein being confused by the public with a business affiliated with Franchisor for any purpose and will otherwise comply with its obligations under this Section 14.7, including without limitation Section 14.7(C).
If Franchisee owns or leases the Franchised Location from someone other than the Franchisor or its Affiliates, this provision does not apply;
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a franchisee may be required to surrender possession of the franchised location to Circle K or its designee under specific circumstances. If Circle K exercises its purchase right or if Circle K is the lessor under the lease, the franchisee must surrender possession, occupancy, control, and use of the franchised location upon Circle K's request. The franchisee is also required to execute assignments or other transfer documentation to perfect the transfer of the franchisee's interest in the right to use and occupy the franchised location to Circle K or its designee.
It's important to note that the franchisee remains responsible for any outstanding unpaid obligations that accrued before Circle K assumed control of the location. These obligations do not disappear simply because the franchisee has surrendered possession. However, if the franchisee owns or leases the franchised location from someone other than Circle K or its affiliates, this provision regarding surrender of possession does not apply.
If Circle K chooses not to take possession and control of the franchised location, the franchisee is responsible for making modifications or alterations to the location immediately upon termination or expiration of the agreement. These changes are intended to prevent the public from confusing the operation with a business affiliated with Circle K. The franchisee must also comply with other obligations under Section 14.7 of the agreement, including Section 14.7(C).