Under what conditions can a Circle K licensee's interest in the agreement be transferred to another party?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) This Agreement is personal to Licensee. Licensee's interest in this Agreement shall not be transferred or assigned by Licensee in whole or in part, directly or indirectly, without the prior written consent of TMC and provided the following conditions are satisfied: (i) new Licensee ("Assignee") meets TMC's qualifications, (ii) Assignee signs TMC's current form of branding agreement, (iii) Assignee assumes all obligations under this Agreement, (iv) the CIRCLE K convenience store located at the Premises is also transferred to Assignee in accordance with the assignment conditions set forth in Licensee's Franchise Agreement, (v) any Sublicense Agreements entered into in connection with this Agreement are also transferred to Assignee, (vi) all amounts due TMC are paid in full, and (vii) release signed by Licensee.
- (b) Subparagraph (a) above applies if any change in the control of the Licensee occurs including, without limitation, the sale, conveyance, alienation, transfer or other change of interest in, or title to, or beneficial ownership of, any voting stock, membership interest, or partnership interest, of or in the Licensee, whether voluntarily, involuntarily, by operation of law, merger or otherwise. A "change in the control" of Licensee shall be deemed to occur whenever a
party gains the ability to influence the business and affairs of Licensee directly or indirectly. A party who owns, or otherwise possesses, twenty-five percent (25%), or more, of the voting stock, membership interest, partnership interest, or beneficial interest shall be deemed to have such ability.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, a licensee's interest in the Branding Agreement is personal and cannot be transferred without TMC Franchise Corporation's prior written consent. Several conditions must be met for the transfer to be approved.
First, the new licensee, referred to as the 'Assignee,' must meet Circle K's qualifications. Second, the Assignee must sign Circle K's current branding agreement. Third, the Assignee must assume all obligations under the existing agreement. Additionally, the Circle K convenience store at the specified location must also be transferred to the Assignee, following the conditions outlined in the licensee's Franchise Agreement. Any sublicense agreements connected to the Branding Agreement must also be transferred to the Assignee.
Finally, all outstanding amounts owed to TMC must be paid in full, and the current licensee must sign a release. These conditions ensure that Circle K maintains control over who operates branded locations and that all financial and contractual obligations are properly transferred. Furthermore, any change in control of the licensee, such as a sale or transfer of 25% or more of the voting stock, also requires adherence to these conditions.