What form of franchise agreement will the transferee of a Petro Stopping Center be required to enter into?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
of the Lease or your Petro Center.
16.3 Conditions to Transfer. Prior to the time of any transfer consented to by us:
- (a) you (and your Owners) must be in compliance with this Agreement;
- (b) the transferee and its owners must be of good moral character and reputation, as determined in our reasonable judgment;
- (c) the transferee and its owners must have sufficient business experience, aptitude and financial resources to operate the Petro Center and must otherwise meet our then applicable standards for Petro Center franchisees;
- (d) you must have paid all amounts due us and have submitted all required reports and statements, and made payments to all Approved Suppliers and Preferred Vendors or made arrangements to do so satisfactory to us and them;
- (e) the transferee (or its owners) must have agreed to complete our standard training program regarding the Petro System and Petro System Standards, at their expense;
- (f) the transferee must have agreed to be bound by all of the terms and conditions of this Agreement;
- (g) the transferee must have entered into our then-current form of franchise agreement and such other then-current ancillary agreements as we may require. The thencurrent form of franchise agreement may have significantly different provisions including a higher royalty fee and advertising contribution than that contained in this Agreement. The then-current form of franchise agreement will expire on the expiration date of this Agreement and will contain the same renewal rights, if any, as are available to you;
- (h) the transfer
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, a transferee must enter into the then-current form of the franchise agreement. This agreement may differ significantly from the original agreement, potentially including higher royalty fees and advertising contributions. However, the new agreement will expire on the same date as the original agreement and will include the same renewal rights, if any, that were available to the original franchisee.
In practical terms, this means that someone buying an existing Petro Stopping Center franchise will not automatically assume the terms of the seller's franchise agreement. Instead, they will be subject to the terms and conditions of the franchise agreement that Petro Stopping Center is offering to new franchisees at the time of the transfer. This could be advantageous if the current franchise agreement is less favorable than older versions, but it also carries the risk of increased costs.
Prospective transferees should carefully review the then-current franchise agreement to understand the full scope of their obligations. They should pay close attention to any changes in royalty fees, advertising contributions, and other financial terms. It is also important to consider the remaining term of the franchise agreement and the renewal rights, as these will directly impact the long-term value of the franchise. Additionally, the transferee must agree to upgrade the Petro Center to conform to the current standards and specifications within a timeframe required by Petro Stopping Center, and pay a transfer fee. The transfer fee is Forty-Five Thousand Dollars ($45,000), but could be One Hundred Thirty Thousand Dollars ($130,000) if the transfer is proposed prior to the first anniversary of the Opening Date, or Ten Thousand Dollars ($10,000) if the proposed transfer is among the owners.
It is common practice in franchising for the franchisor to require transferees to sign the current form of the franchise agreement. This allows the franchisor to maintain consistency across its franchise system and to ensure that all franchisees are operating under the same standards and requirements. However, prospective transferees should always conduct thorough due diligence to assess the financial implications of the new franchise agreement and to determine whether the franchise opportunity is a good fit for their individual circumstances.