Franchising Since: 1999
Headquarters: Tempe, Arizona
Estimated Number of Units: 11,125
Franchise Description: TMC Franchise Corporation is the franchisor. Alimentation Couche-Tard is the franchisor’s parent company. The franchisor offers to certain qualified franchisees a franchise arrangement for Circle K stores which consists of a franchise agreement for the right to use the “Circle K” mark and other distinctive marks, and the business system in connection with the operation of a single Circle K convenience store and motor fuel business. A Circle K store that is franchised to operate as a “Circle K” shall be a full-service convenience store with sufficient floor space, vehicle parking, and inventory levels to offer all of the merchandise and services of a traditional convenience store and that complies with the specifications of a Circle K store as described in the franchisor’s manuals.
Training Overview: Franchisees or their operations manager and their business manager must successfully complete the training program to the franchisor’s satisfaction. All classroom training will take place remotely through video and audio computer applications and/or at other locations as specified by the franchisor. Trainees will also be required to attend a two-week regional in-store training program conducted by the franchisor’s trainers at an existing company-operated location. Depending on the franchisee’s experience, the franchisor may require that they complete additional in-store training, which may or may not overlap with the regional in-store training. On-the-job training may be conducted at various Circle K businesses based on the franchisor’s determination of the franchisee’s business experience. The franchisor will offer periodic training for franchisees or their operations manager and their store manager in specialized fields.
Territory Granted: The Franchise Agreement grants franchisees the right to operate one convenience store only at the location specified. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that owned by the franchisor, or from other channels of distribution or competitive brands that the franchisor controls.
Obligations and Restrictions: The franchisor does not require that franchisees 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 agreements. If franchisees do not personally manage the store, the business must be directly supervised “on-premises” by a manager who has successfully completed the training program and this person must be designated as the “key person” in the agreements. The franchisor requires franchisees to offer and sell at their convenience store only those products and services specified or approved, which will include those products and services generally offered at Circle K businesses. Franchisees must offer for sale all products and services designated as required for all franchisees. Convenience store products and services must be presented in the store according to the floor plan and gondola plan specifications of the Plan-O-Gram presentation design provided to franchisees by the franchisor.
Term of Agreement and Renewal: The length of the initial franchise term is for 10 years from the date the store is deemed by the franchisor to be open for business. If franchisees are in good standing, they can renew for one renewal term. Franchisees must execute the then-current form of Franchise Agreement at renewal.
Financial Assistance: The franchisor offers to qualified franchisees a funding program for business improvements/construction/equipment/conversion costs. The amount of the funding offered will be determined by the franchisor, and will depend on the condition of the premises, including the necessary improvements and branding requirements as well as the fuel pricing structure for the Circle K business.
Investment Tables:
The above information has been compiled from the FDD of Circle K. Year of FDD: 2023.
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| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Regional In-Store Training Fee ($500 per attendee) | $1,000 | $1,000 |
| Travel and Living Expenses While Training | $3,500 | $15,500 |
| Real Estate | Varies. | |
| Construction, Remodeling, and Leasehold Improvements | $1,200,000 | $3,800,000 |
| Other Site Development Costs, including Site Development Fee | $135,000 | $250,000 |
| Furniture, Fixtures & Equipment | $500,000 | $1,200,000 |
| Car Wash (building), if included | $100,000 | $200,000 |
| Car Wash (equipment), if included | $215,000 | $900,000 |
| EPOS and Computer Systems | $51,000 | $65,000 |
| Signs | $50,000 | $120,000 |
| Security Deposits and Licenses and Permits | $5,000 | $25,000 |
| Utility Deposits | $1,500 | $5,000 |
| Vendor Deposits | $0 | $16,000 |
| Inventory (merchandise and fuel) | $100,000 | $220,000 |
| Professional Fees | $1,000 | $5,000 |
| Insurance | $7,500 | $24,000 |
| Grand Opening Costs | $5,000 | $10,000 |
| Fuel Security Deposit | $20,000 | $50,000 |
| Additional Funds (3 months) | $10,000 | $20,000 |
| ESTIMATED TOTAL (new or rebuilt convenience store locations) | $2,430,500 | $6,951,500 |
| Type of Fee | Amount |
|---|---|
| Royalty Fees | The greater of (a) (i) 3.5% of monthly gross sales and (ii) $0.0075 per gallon of monthly motor fuel sales, or (b) $1,500 per month, per franchised business. |
| Royalty for Additional Business Product or Service Offering | Currently, 1% of total gross sales of an additional business that is a coffee/pastry offering. |
| Optional Program Fees | Varies depending on the program but currently ranges from 5% to 75% of optional program revenue. |
| Promotional Fees | General Promotional Fee: 0.25% of gross sales (on gross sales of up to $125,000) for general promotional costs; Local and Regional Promotional Fee: Up to 1.25% of gross sales (on gross sales of up to $125,000) for local and regional promotional costs; National Promotional Fee: Up to 0.25% of gross sales (on gross sales of up to $125,000). |
| Motor Fuel Purchase Price | Varies. |
| Motor Fuel Pass-Through Fee | $35 to $50 per delivery. |
| Interest | Lower of maximum legal rate allowed by law or 1.5% per month. |
| Late Fee | $25 per day beginning on the 11th day after the due date. |
| Insufficient Funds Fee | Currently $50 per payment or the maximum legal rate allowed by law. |
| Late Fee | $25 per day beginning on the 11th day after the due date. |
| Audits and Inspections | Cost of audit/inspection plus late payments as noted above; annual cost of inspection generally ranges from $0 to $400. |
| Software License Fee | $0 per month (currently). |
| POS and Back-Office System Monthly Support and Maintenance Fees | Based on prevailing fee schedule; current fees range from $600 to $1,000 per month. |
| Transfer Fee | The then-current initial franchise fee. |
| Relocation Fee | 50% of then-current initial franchise fee. |
| Liquidated Damages (Franchise Agreement) | An amount equal to royalty payments for a period equal to lesser of 52 accounting periods or the remaining term of the Franchise Agreement, based on the average royalty fee payments per accounting period payable by franchisees for the most recent 13 accounting periods or for a shorter period if the Franchise Agreement hasn’t been in effect for 13 accounting periods. |
| Liquidated Damages (Purchase of Fuel) | An amount equal to the greater of: (i) $0.035 per gallon multiplied by the minimum accounting period volume in motor fuel gallons set forth in the motor fuel agreement, multiplied by the lesser of (a) 52 accounting periods or (b) the number of accounting periods remaining under the term of the motor fuel agreement, or (ii) $0.035 per gallon multiplied by the average accounting period volume in motor fuel gallons actually purchased by franchisees (calculated for the period starting on the effective date of the motor fuel agreement until the termination date) multiplied by the lesser of (a) 52 accounting periods or (b) the number of accounting periods remaining under the term of the motor fuel agreement. |
| Debit/Credit Card Fee/Service Charge | The then-current fees. |
| Liquidated Damages (Credit Network Agreement) | An amount equal to the lesser of (i) 48 or (ii) the remaining number of months under the term of the agreement, multiplied by $3,000. |
| Reimbursement of Equipment/ Construction Funding | Franchisees must pay the franchisor either (a) the entire amount of the equipment/construction funding, if the Convenience Store Franchise Agreement is terminated during the first 36 months of its term, or (b) if the Convenience Store Franchise Agreement is terminated after the first 36 months from the open date, the remaining net value of the equipment which amount will be calculated as follows: the entire amount of the Equipment/ Construction Funding less 1/120 of the funding for each month the store was open and operating in full compliance with the terms of the Convenience Store Franchise Agreement. |
| Debranding Fee | If the franchisee fails to debrand the site to the franchisor’s satisfaction, the franchisee must reimburse the franchisor for all costs incurred in removing from the convenience store items of trade dress (such a special valances, aimers, etc.), signs and other promotional materials bearing the Circle K Marks or otherwise related to the business system. This amount is estimated to be $10,000. |
| Renewal Fee | Currently $0. |
| Taxes | Varies. |
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