What is excluded from the valuation of my Petro Stopping Center when Petro Stopping Center exercises its purchase option?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
We may exclude from the assets purchased cash or its equivalent and any Operating Assets, such as equipment, signs, inventory, materials and supplies that are not reasonably necessary (in function or quality) to the Petro Center's operation or that we have not approved as meeting standards for Petro Centers, and the purchase price will reflect such exclusions.
Source: Item 17 — RENEWAL TERMS. (FDD pages 208–228)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, when Petro Stopping Center exercises its option to purchase your Petro Center, the purchase price will be based on the fair market value of the center, but certain elements are excluded from this valuation. Specifically, the valuation will not include any value for the franchise itself or any rights granted by the franchise agreement. Additionally, the valuation will exclude any value associated with the Marks or Copyrights owned by Petro Stopping Center, as well as any value derived from participation in the Petro Stopping Center System.
In practical terms, this means that the goodwill associated with the Petro Stopping Center brand, its trademarks, and the established system are not factored into the purchase price you receive. The valuation focuses on the tangible assets and the inherent value of the business as an independent entity, rather than as a part of the Petro Stopping Center franchise network. This approach is common in franchise agreements, as the franchisor retains ownership of the brand and system, which are considered separate from the individual franchise unit's value.
Furthermore, Petro Stopping Center may exclude assets such as equipment, signs, inventory, materials, and supplies that are not deemed reasonably necessary for the Petro Center's operation or that do not meet Petro Stopping Center's standards. The purchase price will be adjusted to reflect these exclusions. This provision allows Petro Stopping Center to avoid purchasing outdated or non-standard assets, ensuring that the acquired Petro Center aligns with the brand's operational and quality standards. If the franchisee and Petro Stopping Center cannot agree on the fair market value, an independent appraiser will determine the value.