Under what conditions will a Circle K licensee's payment be considered late?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
ount for personal, family, or household purposes. Licensee will provide TMC with all information and authorization necessary to debit and credit Licensee's account. Licensee agrees to maintain at all times funds in its account sufficient to make payments to TMC at the time of the EFT transaction. Should any EFT transaction be rejected by Licensee's financial institution for Licensee's failure to maintain sufficient funds in Licensee's account, in addition to any other rights TMC may have under this Agreement or the law, TMC may collect an insufficient funds fee of $50 for each insufficient funds payment.
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 payment is considered late under specific circumstances. Payments are considered late if the licensee fails to pay the total amount owed to TMC Franchise Corporation (TMC) by the due date. Additionally, a payment is also considered late if there are insufficient funds in the licensee's account to cover the full amount owed.
If a payment is late, Circle K may charge interest on the past due amount. This interest will be the lesser of 1½% per month or the maximum legal rate allowed by applicable law. In addition to interest charges, if an electronic funds transfer (EFT) transaction is rejected due to insufficient funds, Circle K may also impose an insufficient funds fee of $50 for each rejected payment.
It is crucial for prospective Circle K franchisees to understand these payment terms to avoid incurring late fees and interest charges. Franchisees should ensure they have sufficient funds in their designated commercial account to cover all payments to Circle K by the due date. Maintaining adequate funds and adhering to the payment schedule outlined in the franchise agreement are essential for remaining in good standing with Circle K and avoiding potential financial penalties.