Can Petro Stopping Center act as attorney-in-fact for a Petro Stopping Center franchisee in case of default?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
(iv) as attorney-in-fact for you, or in our own name, and under the powers herein granted, to hold, operate, manage and control the Petro Center and conduct the business, if any, thereof, either personally or by its agents, with full power to use such measures, legally rectifiable, as in its discretion may be deemed proper or necessary to cure such default, including actions of forcible entry or detainer and actions in distress of rent, granting full power and authority to us to exercise each and every of the rights, privileges and powers herein granted at any and all times hereafter;
(v) to cancel or terminate any unauthorized agreements or subleases entered into by you, for any cause or ground which would entitle us to cancel the same;
(vi) to disaffirm any unauthorized agreement, sublease or subordinated lien, to make all necessary or proper repairs, decorating, renewals,
replacements, alterations, additions, betterments and improvements to the Site that may seem judicious, in our sole judgment;
(vii) to insure and reinsure the same for all risks incidental to our possession, operation and management thereof; and/or
(viii) notwithstanding any provision of this Agreement, to declare all of your rights, but not obligations under this Agreement, to be immediately terminated as of the date of your default under the Lease, the Lease Assignment or the Loan Documents.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, Petro Stopping Center has the power of attorney to act on behalf of the franchisee in certain default situations. Specifically, Petro Stopping Center can manage and control the Petro Center, conduct business, and take actions deemed necessary to cure the default. This includes actions such as forcible entry or detainer and actions in distress of rent.
This means that if a franchisee defaults on their obligations, Petro Stopping Center can step in to operate the location. They can use legal measures to address the default, giving them broad authority to rectify the situation. This power of attorney allows Petro Stopping Center to protect its interests and the integrity of the brand by ensuring the continued operation of the Petro Stopping Center.
However, the FDD also states that Petro Stopping Center can cancel or terminate unauthorized agreements or subleases made by the franchisee and disaffirm any unauthorized agreement, sublease, or subordinated lien. They can also make necessary repairs, renovations, and improvements to the site and insure the property. Furthermore, Petro Stopping Center can terminate all of the franchisee's rights, but not obligations, under the agreement as of the date of default under the Lease, the Lease Assignment, or the Loan Documents.
This clause provides Petro Stopping Center with significant control over the franchise in the event of a default, allowing them to take necessary steps to protect their investment and brand reputation. Prospective franchisees should carefully consider the implications of this clause and understand the circumstances under which Petro Stopping Center may exercise its power of attorney.