Under what conditions can a Circle K licensee's interest in the Agreement be transferred or assigned?
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.
(c) TMC may assign this Agreement in whole or in part upon ten (10) days' prior written notice to Licensee.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to the 2025 Circle K Franchise Disclosure Document, a licensee's interest in the Branding Agreement is personal and cannot be transferred or assigned without Circle K's prior written consent. Several conditions must be met for Circle K to consider approving a transfer.
First, the proposed new licensee, referred to as the "Assignee," must meet Circle K's qualifications for new licensees. Second, the Assignee must sign Circle K's current form of branding agreement, indicating their acceptance of the current terms and conditions. Third, the Assignee must assume all obligations under the existing agreement, taking on the responsibilities of the original licensee. The Circle K convenience store at the premises 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.
Furthermore, all outstanding amounts owed to Circle K must be paid in full before the transfer can be approved. Finally, the original licensee must sign a release, relinquishing their rights and claims related to the agreement. The FDD also specifies that these conditions apply to any change in control of the licensee, including the transfer of voting stock, membership interest, or partnership interest, that would allow a party to influence the business, with ownership of 25% or more being deemed as such control. Circle K, however, retains the right to assign the agreement with just ten days' prior written notice to the licensee.