Circle K
Date of Incorporation: 1951
Franchising Since: 1995
Address: Phoenix, Arizona
Country: U.S.
Description: The franchise operates a retail convenience store under the "Circle K" trade name and service marks and the Circle K business system.
Franchise Offer: The franchisor offers the franchisee the right to operate a single Circle K convenience store business. The franchisor may also enter into agreements with existing convenience store operators, existing dealers or existing marketers.
Area development agreements are also granted to qualified franchisees, for the right to develop multiple Circle K Stores in a specific geographical area. The franchisee must commit to develop a minimum number of Circle K Stores in the Licensed Territory within a given period of time.
Financial Assistance: The franchisor offers a loan for authorised expenditures in connection with the Circle K Store. For a newly constructed or raze and rebuilt Circle K Store, the amount of the loan is $45 for each square foot of selling space the Store contains. In no event, will the amount of the loan exceed $75,000.
Training and Assistance: Training includes 2 weeks of classroom training located in the Circle K Systems, Marketing, Accounting, Retailing and Training ("SMART") Academy in Tempe, AZ. ‘On-the-Job’ training accounts for up 2 weeks, based on candidate's experience, located in various Circle K Stores.
Territory: The franchisee will be granted the rights to a non-exclusive franchise business. The Franchise Agreement grants the franchisee the right to operate one convenience store only at the location specified. They will not receive an exclusive territory or any form of territorial protection unless they enter into an Area Development Agreement. Under the Area Development Agreement the franchisee will be granted the right to operate a specified number of Circle K Stores in a specified geographic area for a specified period of time. The franchisor will not establish or license any third party to establish a Circle K Store in the Licensed Territory prior to the expiration of the franchise agreement.
Term of Agreement and Renewal: The length of the franchise term is equal to the lease term or 10 years, whichever is shorter. The franchisee can renew for one renewal term under the then-current franchise agreement.
Obligations and Restrictions: It is not required that the franchisee personally manage the store but they must be actively involved in the day-to-day operations of the store, and spend adequate management time required to maintain the standards of the Agreement.
Total Number of Units: Over 7,100 units worldwide.
Investment Tables:
Initial Investment: (Based on a c-store conversion)
| Expenditures | Low | High |
|---|---|---|
| Initial Franchise Fee | $15,000 | $15,000 |
| Travel and Living Expenses While Training | $2,000 | $12,000 |
| Real Estate | Varies | Varies |
| Construction, Remodeling, and Leasehold Improvements | $25,000 | $25,000 |
| Other Site Development Costs | $15,000 | $100,000 |
| Furniture, Fixtures & Equipment | $15,000 | $210,000 |
| EPOS and Computer Systems | $35,000 | $40,000 |
| Signs | $5,000 | $50,000 |
| Security Deposits and Licenses and Permits | $2,000 | $5,000 |
| Utility Deposits | $1,500 | $3,000 |
| Vendor Deposits | $0 | $16,000 |
| Merchandise Inventory | $25,000 | $50,000 |
| Professional Fees | $1,000 | $5,000 |
| Insurance | $4,500 | $12,000 |
| Grand Opening Costs | $5,000 | $10,000 |
| Additional Funds (3 months) | $10,000 | $20,000 |
| TOTAL | $161,000 | $748,000 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty Fees | 4% of total Gross Sales |
| Promotional Fees | 2% of total Gross Sales |
| Late Payments | Lower of maximum legal rate allowed by law or 1-1/2% per month, not to exceed 18% per annum |
| Audits and Inspections | Cost of audit plus late payments as noted above; cost of inspection |
| Software License Fee | $50 per month (currently) |
| Transfer Fee | The then-current Initial Franchise Fee, not to exceed $100,000 in the event of a multiple Store transfer |
| Relocation Fee | 50% of the Initial Fee |
| Liquidated Damages | 48 months of royalty payments |
| Renewal Fee | Varies |
Date of FDD: 2008
The above information has been compiled from the FDD of Circle K along with online sources.
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