Can Petro Stopping Center file a UCC-1 Financing Statement signed only by them?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Grant: By signing this Agreement you:
(i) grant to us, a first priority security interest in the Collateral, which interest we will agree to subordinate to an Approved Financing, which has met the requirements set forth in Section 4.4, in the form of an agreement with your lender that we approve.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Petro Stopping Center franchisees grant the company a first priority security interest in the collateral. However, this security interest is subordinated to an Approved Financing that meets the requirements outlined in Section 4.4. This subordination is formalized through an agreement with the franchisee's lender, which Petro Stopping Center must approve.
In practical terms, this means that while Petro Stopping Center initially holds a primary security interest, it will step aside to allow a lender providing approved financing to take precedence. This is a common practice to facilitate franchisee access to financing for their business operations. The agreement ensures that the lender's claim on the franchisee's assets comes first, making it easier for the franchisee to secure loans.
However, the franchisee needs to be aware that the financing must be pre-approved by Petro Stopping Center. The franchisor retains the right to approve the agreement with the lender. This stipulation allows Petro Stopping Center to ensure that the financing terms do not negatively impact the franchisee's ability to operate the Petro Stopping Center effectively and meet their obligations to the franchisor. Franchisees should carefully review Section 4.4 and discuss financing options with Petro Stopping Center to ensure compliance and approval.