In the context of the Acknowledgement of Conditional Assignment for Petro Stopping Center, what is the 'Conditional Assignment' and when is it effective?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
-------------------------------------------------------------------------------------------------------------| | Background | | Petro Franchise Systems LLC ("Franchisor") and | | ("Franchisee") are parties to a | | Franchise Agreement, dated | | (the "Franchise Agreement"), with respect to the development | | and operation of a Petro | | Center | | (the "Petro Center") | | on a site located atin | | and as | | more specifically described in the Franchise Agreement (the "Site"). | | Franchisee and | | ("Old Owner") are parties to a Lease Agreement, dated | | (the | | "Lease"). | | Franchisor, Franchisee, and Old Owner are parties to that certain Conditional Assignment | | and Assumption of and Amendment to Lease, effective as of the date of the Lease (the | | "Conditional Assignment"), which provides Franchisor with certain rights, including a right of | | first refusal with respect to the Site (the "ROFR") and the right to assume Franchisee's rights under | | the Lease (the "Lease Assumption Rights"). | | Old Owner has transferred the Site to New Owner, who is the successor landlord under the | | Lease. | | Acknowledgement |
New Owner hereby acknowledges and agrees: (i) that the Lease and Conditional Assignment remain in full force and effect; (ii) that the Lease has not been modified or amended
in any manner, being assigned in the same form of the Lease as described above; and (iii) that there are no defaults under the Lease. New Owner further agrees to be bound by the terms of the Conditional Assignment as if it was the Old Owner, and specifically acknowledges and agrees that it's respective rights with respect to the Site and Lease are subject to the ROFR and Lease Assumption Rights provided to Franchisor under the Conditional Assignment.
[SIGNATURES ON FOLLOWING PAGE]
| IN WITNESS WHEREOF, the parties have | executed this Acknowledgement as of the date |
|---|---|
| set forth above. | |
| By: | |
| Name: | |
| Title: | |
EXHIBIT "E" TO THE FRANCHISE AGREEMENT MEMORANDUM OF RIGHT OF FIRST REFUSAL AND RIGHT TO BUY
Prepared/requested by, record and return to: David G. Gunther, Esquire Hyland Levin Shapiro LLP 6000 Sagemore Drive, Suite 6301 Marlton, NJ 08053
MEMORANDUM OF RIGHT OF FIRST REFUSAL AND RIGHT TO BUY
| THIS MEMORANDUM (this "Mem | orandum") is made on, between |
|---|---|
| (the "Owr | ner"), and PETRO FRANCHISE SYSTEMS LLC (the |
| "Holder"). | |
| PROPERTY: | See Exhibit A attached hereto and made a part hereof and known as |
| HOLDERS' RIGHTS: | Under the terms of that certain Franchise Agreement, as amended (the "Franchise Agreement"), Holder was granted a right of first refusal to purchase certain assets, including the Property pursuant to Section 16.8 of the Franchise Agreement and a right to purchase certain assets, including the Property pursuant to Section 19.5 of the Franchise Agreement. |
Source: Item 4 — Other Owners: (FDD pages 228–302)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the Conditional Assignment is formally titled "Conditional Assignment and Assumption of and Amendment to Lease." This agreement, effective as of the date of the Lease, involves Petro Franchise Systems LLC (the Franchisor), the Franchisee, and the Lessor. The Franchise Agreement mandates that the Franchisee delivers this Assignment to the Franchisor as a prerequisite for being granted the franchise.
The Conditional Assignment grants Petro Stopping Center certain rights, including a right of first refusal (ROFR) regarding the site and the right to assume the Franchisee's rights under the Lease (Lease Assumption Rights). The agreement ensures that the New Owner acknowledges the Lease and Conditional Assignment remain fully effective, without modifications, and that no defaults exist under the Lease. The New Owner agrees to be bound by the terms of the Conditional Assignment, recognizing that their rights concerning the Site and Lease are subject to the ROFR and Lease Assumption Rights granted to Petro Stopping Center.
In practical terms, this means that Petro Stopping Center retains significant control over the location of its franchises, even if the property ownership changes. The right of first refusal allows Petro Stopping Center to purchase the property if the franchisee decides to sell, while the lease assumption rights enable Petro Stopping Center to take over the lease if the franchisee defaults. This arrangement protects Petro Stopping Center's interests and ensures the continued operation of the franchise at its location. The franchisee should understand that this assignment is a condition of receiving the franchise and that it gives Petro Stopping Center substantial rights related to the leased property.