Standard
The Standard Circle K franchise offers retail convenience stores and motor fuel services under the Circle K brand. Known for its wide range of products including fuel, groceries, and consumer goods, it operates in the convenience store and gas station industry.
Standard franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for opening a single Circle K Business ranges from $3,073,500 to $8,410,500. This includes the initial franchise fee and other start-up costs but excludes real estate acquisition costs [p.35].
What is the initial franchise fee?
The initial franchise fee is $25,000 for the first Circle K Business. For each additional Circle K Business, a discounted Initial Franchise Fee of $15,000 applies [p.32]. This fee is not financed by the company [p.32].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is based on a percentage of merchandise gross sales, while the advertising fee (promotional fees) can vary depending on the Designated Marketing Area (DMA) and may range up to 1.25% of your Circle K Business's Gross Sales for regional promotional costs. These fees are subject to change from time to time [p.50].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement must be for at least 10 years or the term specified in the Franchise Agreement, whichever is longer [p.130, p.39]. You may have the option to renew the agreement, but this would typically involve executing a new form of franchise agreement and paying the then-current renewal fee, which as of the date of the Disclosure Document is $5,000, with the possibility of future increases [p.32, p.120].
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires obtaining consent from the franchisor and paying a transfer fee. As of the date of this Disclosure Document, the transfer fee would be $25,000 [p.28]. This fee may be reduced under certain circumstances, such as transferring to a spouse or adult child, a corporation where you retain majority ownership, or in cases where only your name is changed [p.4; p.28]. Additionally, the proposed transferee must attend training and pay the transfer fee before the transfer can proceed [p.28].
On what grounds can the franchisor terminate the agreement?
The franchisor may terminate the agreement on any grounds available by law [p.270]. Additionally, if the franchise agreement expires and the franchisee continues to operate without exercising renewal rights, the franchisor may treat the agreement as expired or continue it on a month-to-month basis until a new agreement is reached or terminated [p.157].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. The franchise agreement allows competition from other Circle K locations, both owned by the company and operated by other franchisees, as well as from other channels of distribution controlled by the franchisor [p.54, p.106]. This isn't specified in the excerpts.
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program consisting of one week of classroom training at their facilities, followed by two weeks of on-the-job training at various Circle K businesses. Additionally, after Franchisee and Business Manager successfully complete the Training Program, a representative from the franchisor will provide opening assistance and ongoing support as needed, including training employees and evaluating initial business operations [p.138-139]. The franchisor also offers access to online Circle K Business Systems Manuals and provides deferred revenue recognition based on the satisfaction of performance obligations under the franchise agreement [p.95] [p.12].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts. The provided FDD does not include information on the total number of franchised outlets currently active or the number that have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet that a prospective franchisee is considering purchasing. However, they do not make any financial performance representations for new outlets and do not authorize their employees or representatives to make such representations [p.70]. The franchisor can include financial performance information in the disclosure document if there is a reasonable basis for it [p.64], but this must be clearly stated as separate from the figures provided in Item 19 of the FDD [p.255].
What am I restricted to selling, and where must I buy supplies?
You are required to sell only those products and services specified or approved by the franchisor, which generally include those offered at Circle K Businesses [p.59]. You may not sell any products, merchandise, or services relating to the Circle K Marks or purchased through negotiated purchase arrangements with suppliers at any location other than your Franchised Location [p.59]. Additionally, you must purchase approved products and services that meet the franchisor's current standards and specifications as established in the Business Systems Manuals [p.36]. Depending on your location, some items may need to be purchased from a primary source designated by the franchisor [p.36].