What written verification must a Circle K purchaser provide to the seller to receive the Conversion/Improvement Amount?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
purposes of constructing, installing and implementing the Improvements, provided that the Improvements conform with Seller's Image Standards; and/or (B) a conversion amount equal to the Conversion Amount set forth in the Incentive Amounts Schedule (said amount is the "Conversion Amount") to assist Purchaser in implementing the Conversion. Seller's obligation to disburse unto Purchaser the Conversion/Improvement Amount is conditioned upon Purchaser's satisfaction, at the time such disbursement is due by Seller to Purchaser as set
forth in the Incentive Amounts Schedule, of all of the following conditions and the conditions contained in paragraph 1(c) below: (A) Purchaser shall have obtained, and provided to Seller written verification reasonably satisfactory to Seller that Purchaser has obtained, all approvals, permits, licenses, entitlements, and consents required to make the Improvements and/or Conversion. (B) Purchaser shall have duly executed and delivered to Seller (1) a promissory note in substantially the form attached hereto as Exhibit A and incorporated herein, in a principal amount equal to the Conversion/Improvement Amount ("Note"), and (2) a Security Agreement and Personal Guaranty in substantially the form attached to the Franchise Disclosure Document as Exhibit J. (C) Purchaser shall have provided Seller with reasonable proof the Purchaser has entered into all agreements using only Seller approved contractors and other third parties necessary for Purchaser to construct and install and/or make, at Purchaser's sole expense, the Improvements and/or Conversion set forth in the Conversion/Improvements Schedule. (D) Purchaser shall expend the Conversion/Improvement Amount solely for the purposes of constructing, installing and implementing the Improvements and/or performing the Conversion.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, to receive the Conversion/Improvement Amount, a purchaser must provide written verification to the seller that they have obtained all necessary approvals, permits, licenses, entitlements, and consents required to make the Improvements and/or Conversion. This verification must be reasonably satisfactory to the seller.
In addition to providing the written verification, the purchaser must also execute and deliver to the seller a promissory note in the form attached as Exhibit A, with the principal amount equal to the Conversion/Improvement Amount. They must also provide a Security Agreement and Personal Guaranty in the form attached as Exhibit J to the Franchise Disclosure Document. The purchaser must also provide reasonable proof that they have entered into agreements with seller-approved contractors and other third parties necessary for the construction and installation of the Improvements and/or Conversion, at the purchaser's sole expense.
Furthermore, the purchaser is obligated to use the Conversion/Improvement Amount exclusively for constructing, installing, and implementing the Improvements and/or performing the Conversion. Upon the seller's request, the purchaser must provide documentation to substantiate these expenditures, including proof of payment for third-party invoices and related lien releases for work and materials related to the Improvements and/or Conversion. The purchaser must complete the Improvements and/or Conversion to the seller's satisfaction by the agreed-upon Completion Deadline.