Circle K Franchise Cost & Fees

CONVENIENCE STORE FRANCHISES

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Year Business Began: 1951

Franchising Since: 1999

Headquarters: Tempe, Arizona

Estimated Number of Units: 8,050

Franchise Description: TMC Franchise Corporation is the franchisor. 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 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.

Training Overview: The franchisor will train franchisees or their operations manager
and their store manager, all of whom must complete the training program to the
franchisor’s satisfaction. Franchisees will receive two weeks of classroom training,
which may also include on-the-job training. All classroom training will take place in
Tempe, Arizona and/or at other locations as specified by the franchisor. Training will be
led by trainers that are employed by the franchisor or its affiliates, or by contract
trainers, all of whom have had previous training or convenience store operations
experience. The Business Systems Manuals will be used as the principal instructional
material. On-the-job training may be conducted at various Circle K Stores based on the
franchisor’s determination of the franchisee’s business experience. The franchisor may
hold additional or refresher training courses from time to time, and may require that
franchisees and their store managers (or, if they are a Multi-Site Operator, their
designated trainer) attend these courses.

Territory Granted: The Convenience Store 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 Convenience Store Franchise Agreement. 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 Convenience Store Franchise Agreement.
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 Stores. Franchisees must offer for sale all
products and services designated as required for all franchisees.

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 an Equipment/Construction Funding

program for the Convenience Store offering. If franchisees accept funding for the store,
the franchisor will use these funds to off-set the cost of equipment and construction at
 the store, and pay invoices on the franchisee’s behalf. The amount of funding offered
will depend on whether the Circle K Store is a newly constructed store or conversion
Circle K Store.

Estimated Initial Investment

Name of Fee Low High

Initial Franchise Fee $0 $25,000

Travel and Living Expenses while Training $3,500 $15,500

Real Estate Varies

Construction, Remodeling, and Leasehold Improvements $175,000 $950,000

Other Site Development Costs $120,000 $300,000

Fixtures, Furniture and Equipment $175,000 $325,000

EPOS and Computer Systems $39,000 $46,000

Signs $15,000 $85,000

Security Deposits and Licenses and Permits $2,000 $10,000

Utility Deposits $1,500 $5,000

Vendor Deposits $0 $16,000

Merchandise Inventory $60,000 $100,000

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

ESTIMATED TOTAL (New or Rebuilt Convenience Store Locations) $611,500 $1,924,500

Investment Tables:
Type of Fee Amount

Royalty Fees (single Single Site Operator: 3.0% to 7.5% of total Gross Sales, with a minimum of $1,000 per month;
site) Multi-Site Operator: 2.5% to 7.5% of total Gross Sales, with a minimum of $1,000 per month

Royalty for Co-branded

1.0% of total Gross Sales.
Coffee/Pastry Offering

Optional Program Fees Varies depending on the program but currently ranges from 5% to 75% of Optional Program revenue

General Promotional Fee: 0.25% of Gross Sales (on Gross Sales of up to $125,000) for general
promotional costs;

Promotional Fees 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)

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.

Audits and Inspections Cost of audit plus late payments as noted above; cost of inspection.

Software License Fees $0 per month (currently).

Transfer Fees The then-current Initial Franchise Fee.

Relocation Fees 50% of then-current Initial Franchise Fee.

An amount equal to royalty payments for a period of 48 months or the remaining term of the Convenience
Liquidated Damages Store Franchise Agreement based on the monthly Gross Sales for the most recent 12-month period or for a
shorter period if the Convenience Store Franchise Agreement hasn't been in effect for 12 months.

Franchisees must pay the franchisor either (a) the entire amount of the Equipment/Construction Funding, if
Reimbursement of the Convenience Store Franchise Agreement is terminated during the first 36 months of its term, or (b) the
Equipment/ remaining net value of the equipment which amount will be calculated as follows: the entire amount of the
Construction Funding 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.
 If the franchisee fails to DE brand 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
DE branding Fee
valance, 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

The above information has been taken from the FDD of Circle K. Year of FDD: 2018

https://www.franchisehelp.com/franchises/circle-
https://www.franchisedirect.com/retailfranchises/circle-k-franchise-07027/ufoc/

https://www.franchisedirect.com/retailfranchises/7-eleven-franchise-07012/ufoc/
7 Eleven Franchise Cost & Fees
CONVENIENCE STORE FRANCHISES

7 Eleven Franchise

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Year Business Began: 1927

Franchising Since: 1964

Headquarters: Irving, Texas

Estimated Number of Units: 62,105

Franchise Description: 7-Eleven, Inc. is the franchisor. Franchisees operate extended-hour retail
convenience stores that emphasize convenience to the guest and provide a broad array of products,
including many not traditionally available in convenience stores. These products include an assortment
of high-quality fresh food, hot food and proprietary beverage offerings, and private brand items. The
stores are generally open every day of the year (except, at the franchisee’s option, Christmas Day),
usually 24 hours a day.

There are two types of franchises offered:

A Traditional Individual 7-Eleven Store: The franchisor (7-Eleven) acquires the land, building and
equipment for the store, and 7-Eleven or an affiliate leases the franchisee a fully equipped and stocked
7-Eleven store that is ready to operate. The granting of a franchise to a franchisee does not give the
franchisee the right to operate any additional units. In the 7-Eleven franchise program for traditional
individual 7-Eleven stores, only single unit franchises are offered.

Business Conversion Program (BCP) franchise: The franchisee is responsible for acquiring the land and
building for a store site and pays a different royalty than traditional franchisees. The franchisee of a BCP
is also subject to a different disclosure document than the franchisee of a traditional store.
Training Overview: The Training Program consists of approximately 300 hours of training at the
franchisor’s Store Support Center located in Irving, TX and in a 7-Eleven Training store. Successful
completion of the Training Program does not guarantee that the franchisee will be approved as a
franchisee. The franchisee must have at least two individuals successfully complete the Training
Program within a reasonable period of time after taking possession of the store. The franchisor may
offer additional training when deemed necessary based on changes in the 7-Eleven System. Franchisees
agree to participate, and to require their employees to participate, in any additional training programs
the franchisor makes available relating to the proper sale of age restricted products or the sale of other
products that are regulated and which could lead to a violation of law if not properly sold, and any other
training programs it designates as required. Franchisees and their employees must successfully
complete all required additional training to the franchisor’s complete satisfaction as it may determine in
its sole discretion.

Territory Granted: The franchise agreement covers a single 7-Eleven store location. Franchisees will not
receive any minimum territory. Franchisees will also not receive an exclusive territory.

Obligations and Restrictions: Franchisees agree under the franchise agreement to devote their best
efforts to the store and to actively and substantially participate in the actual operation of the franchise.
Franchisees further agree to work full time in their store and supervise day-to-day operations, and make
themselves available to meet with the franchisor at reasonable times, at the franchisor’s request, but in
any event franchisees agree to meet with the franchisor at least once a week at their store during
reasonable business hours. If franchisees are temporarily out of town or otherwise temporarily
unavailable to meet with the franchisor at any time, they agree that the franchisor can meet with their
employees to discuss the franchisee store's business and take any action contemplated or allowed
under the franchise agreement. If franchisees are married, we prefer that both the husband and wife
sign the franchise agreement and actively participate in the franchise business. The store must carry all
categories of inventory specified. Franchisees must carry, use and offer for sale only the inventory and
other products that are consistent with the type, quantity, quality, and variety associated with the 7-
Eleven Image and as the franchisor specifies in the franchise agreement. Franchisees must maintain in
the store at all times a reasonable and representative quantity of all proprietary products listed in the
franchise agreement or that the franchisor otherwise lists in writing. Franchisees must carry at the store
a reasonable and representative quantity of all designated nationally or regionally advertised or
promoted products. Franchisees must comply with the franchisor’s merchandising and shelf life
requirements for fresh foods.

Term of Agreement and Renewal: The franchise term ends at the earlier of 10 years after theEffective
Date of the franchise agreement or 30 days before the end of the lease of the real estate for the store
 that was in effect on the Effective Date. One renewal term is available for a term equal to the number of
years of the initial term in the then-current franchise agreement.

Financial Assistance: The franchisor may finance the Down Payment and Initial Franchise Fee in certain
situations. The franchisor also will establish and maintain an Open Account for the franchisee as part of
the bookkeeping services provided (see FDD for further details). The franchisor does not offer financing
arrangements from any other sources, and does not receive payments for the placement of any
financing.

Estimated Initial Investment

Name of Fee Low High

Initial Franchise Fee $0 $1,000,000

Training Expenses $0 $9,000

Down Payment for Opening Inventory $20,000 $20,000

Additional Opening Inventory $13,200 $48,100

Cash Register Fund $300 $5,000

Store Supplies $250 $2,000

Licenses and Permits $6,000 $8,000

Real Estate and Equipment Covered in “7-Eleven Charge” (see Other Fees)

Goodwill Only applicable to incoming franchisee’s buying a current franchisee’s interest in a franchise

Additional Funds During First 3 Months $0 $60,000

ESTIMATED TOTAL $39,750 $1,152,100

Inv

Other Fees

Type of Fee Amount

7-Eleven Charge Variable percentage of Gross Profit.

The Advertising Fee is based on the Gross Profit of the store for the immediately preceding 12 months (Base
Advertising Fee Period Gross Profit):
If Base Period Gross Profit exceeds $400,000,the Advertising Fee is 1.5% of Gross Profit;
If Base Period Gross Profit is between $300,000 to $400,000, the Advertising Fee is calculated using the following
Other Fees

Type of Fee Amount

formula: Base Period Gross Profit multiplied by 0.045, minus $12,000, divided by Base Period Gross Profit,
multiplied by Gross Profit for the current Accounting Period; and
If Base Period Gross Profit is less than $300,000, 0.5% of Gross Profit

Audits Varies.

Interest Expense Varies depending on amount financed by franchisor. The annual percentage rate is currently 6.5%

Indemnification Varies, depending on loss.

Foodservice
Varies, depending on cure costs.
Operations

Maintenance Varies, according to particular store and equipment.

Premiums Varies, depending on premium received.

Training Varies, depending on type of training offered and location.

Other Fees

Type of Fee Amount

Inspection and
Cost of inspection, if applicable, and cost of test.
Testing

Early Termination
$5,000
Fee

Service Fees Varies, depending on service provided.

Mistery Shop Fees $6.50-$13 per shop.

Close Out Fee $200