What are the consequences if a Petro Stopping Center fails to cure a default under their lease?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
(l) you fail to cure any default under your Lease or you lose the right to possession of the Petro Center or the Site;
18.3 After Notice. Except as described in Section 18.2 above, and except as otherwise provided by applicable law, we may also terminate this Agreement after we notify you of our intention to do so because of the occurrence of any of the following events and your failure to cure the default specified in our notice to you (the "Default Notice") within 30 days of our Default Notice:
18.4 Cross Default. Any default by you under the terms and conditions of this Agreement or any other agreement between us and you or between us and your Affiliates, which is so material as to permit us to terminate this Agreement or any other agreement, will be deemed to be a default of each and every agreement between us and you or us and your Affiliates. Furthermore, in the event of termination, for any cause, of this Agreement or any other such agreement between the parties hereto, we may, at our option, terminate any or all other agreements between you (or your Affiliates) and us, or between you (or your Affiliates) and our Affiliates.
19. RIGHTS AND OBLIGATIONS UPON TERMINATION.
19.5 Our Right to Purchase.
- (a) Exercise of Option. Upon our termination of this Agreement in accordance with its terms and conditions, or your termination of this Agreement without cause or the expiration of this Agreement, we have the option, exercisable by giving written notice to you within 60 days after the date of such termination, to purchase your Petro Center (including all or any portion of the real property related to the Petro Center) from you, including the ownership or leasehold rights to the Site.
- (b) Leasehold Rights. If we exercise the option to purchase your Petro Center as described above, then you agree at our election:
- (i) to assign your leasehold interest in the Site to us (for no additional consideration and at no additional cost to us); or
- (ii) to enter into a sublease for the remainder of the lease term on the same terms (including renewal options) as the prime lease (at no additional cost to us).
- (c) Purchase Price. The purchase price for your Petro Center under this Section will be the fair market value ("Fair Market Value") of the Petro Center exclusive of any goodwill, determined in a manner consistent with reasonable depreciation of the Petro Center's equipment, signs, inventory, materials and supplies, provided that the Petro Center will be valued as an independent business and its value will not include any value for:
- (i) the Franchise or any rights granted by this Agreement;
- (ii) the Marks or Copyrights; or
- (iii) participation in the System.
Source: Item 17 — RENEWAL TERMS. (FDD pages 208–228)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, failing to cure a default under the lease or losing the right to possession of the Petro Center site can lead to termination of the franchise agreement. Specifically, the agreement can be terminated after Petro Stopping Center provides a Default Notice and the franchisee fails to cure the default within 30 days. This means a franchisee must address any lease violations promptly to avoid losing their franchise.
In addition to potential termination, any default under the franchise agreement or any other agreement between Petro Stopping Center and the franchisee (or their affiliates) that is significant enough to warrant termination will be considered a default across all agreements. This "cross default" provision means that a lease default could trigger the termination of other agreements as well. Furthermore, if any agreement is terminated for any reason, Petro Stopping Center has the option to terminate all other agreements with the franchisee or their affiliates.
Upon termination of the franchise agreement, Petro Stopping Center has the option to purchase the Petro Center, including the real property or leasehold rights to the site. The purchase price will be the fair market value of the Petro Center, excluding any goodwill associated with the franchise, trademarks, or the Petro Stopping Center system. If Petro Stopping Center exercises this option, the franchisee must assign their leasehold interest or enter into a sublease with Petro Stopping Center for the remainder of the lease term at no additional cost to Petro Stopping Center.
These terms highlight the critical importance of maintaining compliance with the lease agreement for a Petro Stopping Center franchise. Failure to do so not only risks losing the specific location but also potentially jeopardizes all other agreements with the franchisor and could result in the sale of the business at fair market value, excluding the value of the brand and franchise system.