Does the Petro Stopping Center Franchise Agreement include any non-compete clauses?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
19.4 Competitive Restrictions.
- (a) Post-Term Non-Compete Covenants. You and your Owners agree that, for a period of two (2) years commencing on the effective date of termination or expiration of this Agreement, or the date on which a Person restricted by this Section begins to comply with this Section, whichever is later, neither you nor any of your Owners (nor any of your or your Owners' spouses or children) will:
- (i) have any direct or indirect interest as a disclosed or beneficial Owner, investor, partner, director, officer, employee, franchisee, licensee, consultant, operator, licensor, manager, representative, landlord, sub-landlord, tenant or agent or in any other capacity in any Competitive Business operating:
- within the Protected Area (if any), including at the Site;
- within 75 miles of the Protected Area (if any), and if not, within 75 miles of the Site, and including at the Site;
- within 75 miles of any other Petro Center (franchised or otherwise) in operation or which is under construction and granted the right to operate in such area on the later of the effective date of the termination or expiration of this Agreement or the date on which a Person restricted by this Section complies with this Section; or
- anywhere in the United States or Canada in connection with a regional or national chain operating a Competitive Business (including but not limited to Pilot, Bosselman, Flying J, Love's, or Sapp Bros.).
- (ii) lease, license or otherwise permit the Site, or any portion of it, to be used or occupied by a regional or national chain operating a Competitive Business (including but not limited to Pilot, Bosselman, Flying J, Love's, or Sapp Bros.)
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, the franchise agreement contains post-term non-compete covenants that apply to the franchisee and their owners. These covenants restrict the franchisee and their owners from engaging in any Competitive Business for two years after the termination or expiration of the franchise agreement. The start date for the non-compete period is either the effective date of termination/expiration or the date the person begins complying with the restriction, whichever is later.
The non-compete restrictions apply within specific geographic areas. These areas include the Protected Area (if any), within 75 miles of the Protected Area (or 75 miles of the Site if there is no Protected Area), within 75 miles of any other Petro Center, or anywhere in the United States or Canada if it involves a regional or national chain operating a Competitive Business such as Pilot, Bosselman, Flying J, Love's, or Sapp Bros. The franchisee is also prohibited from leasing or licensing the Site to any regional or national chain operating a Competitive Business.
An amendment to the standard non-compete clause replaces the 75-mile radius with a 60-mile radius. This change affects the distance restriction around the Protected Area or the Site, as well as around other Petro Centers. The amended clause also removes the specific prohibition against involvement with a regional or national chain operating a Competitive Business anywhere in the United States or Canada. If compliance with the non-compete isn't voluntary, the two-year period begins upon a court order enforcing the provision.
These non-compete clauses are fairly standard in the franchise industry to protect the brand and market share of Petro Stopping Center. Prospective franchisees should carefully consider the implications of these restrictions, especially concerning their future business activities after the franchise agreement ends. It is important to understand the defined geographic areas and the types of competitive businesses that are restricted.