How is the value of good and saleable merchandise determined for a Circle K franchise upon expiration or termination of the agreement?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
No value will be assigned to unsaleable merchandise and equipment, and Franchisor may direct Franchisee to remove such items from the Franchised Location.
The value of such saleable inventory and equipment may, in Franchisor's sole discretion and to the extent that it does not infringe upon the security rights of others, be credited to any outstanding obligations of Franchisee to Franchisor and its ownership will be transferred to Franchisor if so credited. If the value of the unencumbered saleable inventory and equipment exceeds the amount owed by Franchisee to Franchisor on the date of expiration or termination of this Agreement, Franchisor may select that inventory and equipment the value of which it wishes to apply to the outstanding debt of Franchisee to Franchisor and return the balance of unencumbered inventory and equipment to Franchisee and Franchisee may dispose of such inventory and equipment, subject to compliance with the other terms of this Section 14.7.
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to the 2025 Circle K Franchise Disclosure Document, upon the expiration or termination of the franchise agreement, any unsaleable merchandise and equipment will not be assigned any value, and Circle K may instruct the franchisee to remove these items from the location.
The value of saleable inventory and equipment can be credited towards any outstanding obligations the franchisee owes to Circle K, at Circle K's discretion, provided it does not infringe upon the security rights of others. If this occurs, the ownership of the credited inventory and equipment will be transferred to Circle K.
If the value of the unencumbered saleable inventory and equipment exceeds the franchisee's debt to Circle K on the date of expiration or termination, Circle K can select the inventory and equipment they want to apply to the outstanding debt. The remaining unencumbered inventory and equipment will be returned to the franchisee, who can then dispose of it, adhering to the terms outlined in Section 14.7 of the franchise agreement.