This post was updated on December 22, 2015 to reflect information from Circle K’s 2015 FDD (Item 7).
Detailed Estimates of Circle K Convenience Store Franchise Costs Based on Item 7 (Estimated Initial Investment) of Circle K’s 2015 Franchise Disclosure Document
For New or Rebuilt Convenience Store Locations
1. Initial Franchise Fee: $25,000
2. Travel and Living Expenses While Training: $3,500 to $15,500
- You must pay the salaries, fringe benefits, travel costs, and room and board of the manager and any other employees during the time that they attend the initial training program, as well as any additional or special training that may be requested or required of you or your managers.
3. Real Estate: Amount Not Specified
- If you do not own suitable real estate, the land and building for your Store must be purchased or leased. Circle K Stores currently average approximately 3,200 square feet in size and generally require approximately 40,000 square feet of land to adequately accommodate the building, parking lot, easements, etc.
- The cost of purchasing unimproved land will vary depending on location, availability of utilities, and other factors, and cannot be estimated by Circle K.
- On occasion, the franchisor or one of its affiliates may own or lease the property where your Store is located. Under these circumstances, you will sign a separate lease agreement with the franchisor or one of its affiliates.
4. Construction, Remodeling, and Leasehold Improvements: $175,000 to $750,000
5. Other Site Development Costs: $120,000 to $250,000
6. Site Development Fee: $950
- Based upon Circle K’s past experience, the cost estimates for constructing a Circle K Store is dependent upon factors such as the general cost of building in your location, union or non-union costs, local building code and permit requirements, the size of your Store, the types of materials used to construct your Store, the cost of construction labor, the cost of property, and other similar factors.
- In addition to construction costs, development costs may be incurred for engineering, architectural, design, real estate, legal, and other professional services.
- Construction and development cost estimates assume that there are no unusual site conditions and that adequate utilities are available at the building pad or adjacent to it.
- Circle K will select a project management firm to assist you with the development and construction of your Store. Specifically, the third-party management firm will purchase and/or install convenience store equipment, prepare plans, check lists and equipment cut sheets, obtain bids, and provide any other services to assist in the development of your Store.
- If you accept Equipment/Construction Funding from Circle K, it will use these funds to pay any costs associated with the third-party management firm on your behalf.
- Additionally, you will pay Circle K a Site Development Fee in the amount of $950.
- If you do not accept any Equipment/Construction Funding from Circle K, you will be responsible for all costs, fees, and markups associated with the use of the third-party management firm.
- The estimates contained in Item 7 include the cost for the third-party management firm.
- The cost will vary depending on the condition of the premises. In addition, if you are converting an existing convenience store, these costs may be reduced dramatically depending upon the condition of your stores.
7. Furniture, Fixtures, and Equipment: $175,000 to $280,000
8. EPOS and Computer Systems: $38,000 to $45,000
9. Signs: $15,000 to $65,000
- You will pay for the permitting and the exterior sign fixtures which include Circle K’s trademark. You will pay for the installation of the sign fixtures and any maintenance associated with these signs. Circle K will own these signs, and you will have no ownership or other possessory interest in them.
- You must purchase or lease all other interior and exterior sign fixtures specified by Circle K.
- If you accept Equipment/Construction Funding, these costs will be paid for out of the funds. If you decline Equipment/Construction Funding, you will be solely responsible for these costs.
10. Security Deposits and Licenses and Permits: $2,000 to $5,000
- You may be required to pay a security deposit under your real estate lease with a third party and other deposits for utilities and insurance premiums which may or may not be refundable. These amounts can vary significantly in different areas, and you should verify this estimate with local authorities.
- It is your responsibility to confirm that all of the specific deposits required for your Store are paid.
11. Utility Deposits: $1,500 to $3,000
- Deposits for utility services are typically required at the time the service is applied for and may or may not be refundable. It is your responsibility to confirm that all of the specific deposits required for your Store are paid.
12. Vendor Deposits: $0 to $16,000
13. Merchandise Inventory: $60,000 to $100,000
- The estimated range of the cost for the inventory for a new Store is from $60,000 to $100,000. You must purchase inventory as specified by Circle K.
- If you already own a convenience store and are converting it to a Circle K, you may be required to purchase additional inventory so that the inventory in your Store is comparable to the inventory in other Circle K Stores. The estimated range of the cost for the inventory for a c-store conversion is from $25,000 to $50,000.
14. Professional Fees: $1,000 to $5,000
- You may find it necessary to retain an attorney to review the Convenience Store Franchise Agreement or to assist in forming a corporation, partnership, or limited liability company. You may also want to retain an accountant for advice in establishing and operating your business and filing the necessary tax forms and returns.
15. Insurance: $4,500 to $12,000
- You must obtain and maintain, at your expense, insurance coverage for your Store as required in the Convenience Store Franchise Agreement. The cost of insurance varies, depending upon the insurance company you select, the location of your Store, value of equipment and improvements, number of employees, and other factors.
16. Grand Opening Costs: $5,000 to $10,000
- You must have a grand opening celebration at your Store. The Business Systems Manuals contain a grand opening guide to assist you. Circle K will also provide a grand opening materials package to you.
- If you contribute Tier II Promotional Funds, you will be reimbursed (from the Promotional Fund) for pre-approved expenditures in the amount of $0.50 for each $1.00 you spend, up to a maximum reimbursement of $4,000.
17. Additional Funds (3 months): $10,000 to $20,000
- This amount represents the range of your initial start-up expenses over the first 3 months of operation and includes payroll costs, but does not include any salary for one Store Manager, to the extent these costs are not covered by sales revenues.
- These figures are only estimates and there is no assurance or guarantee that you will not have additional expenses during this start-up phase or after.
18. Total: $636,450 to $1,602,450
- The estimates provided in the chart above are based upon a freestanding, full-service, new Circle K Store. Circle K relied upon its collective experience during the past twenty years when preparing these figures.
- Please note that the total amount of your initial investment does not include the cost of acquiring real estate.