Does the Petro Stopping Center Franchise Agreement outline the terms for renewal?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL TERMS.]
17. RENEWAL TERMS.
- 17.1 Extension. Upon expiration of this Agreement, subject to the conditions of this Section, you will have the right to operate the Petro Center for two (2) additional five (5) year periods on the terms and conditions of the franchise agreement we are then using in granting franchises for Petro Centers (each, a "Renewal Term"), if you (and each of your Owners) have substantially complied with this Agreement during its Term and any Renewal Term and either:
- (a) you maintain possession of and agree to remodel and/or expand the Petro Center, add or replace improvements, equipment and signs and otherwise modify the Petro Center as we require to bring it into compliance with specifications and standards then applicable for Petro Centers; or
- (b) if you are unable to maintain possession of the Petro Center, you secure substitute premises we approve, develop such premises in compliance with specifications and standards then applicable for Petro Center until operations are transferred to the substitute premises.
- 17.2 Grant. You must give us written notice of your election to renew your Franchise for a Renewal Term, during the last year of the Term or the then-current Renewal Term, but no later than 180 days before expiration. We will respond ("Response Notice"), within 90 days after we receive your notice, of our decision, either:
- (a) to grant you a Renewal Term;
- (b) to grant you a Renewal Term on the condition that deficiencies of the Petro Center, or in your operation of the Petro Center, are corrected; or
- (c) not to grant you a Renewal Term.
If applicable, our Response Notice will:
(d) describe the remodeling and/or expansion of the Petro Center and other improvements or modifications required to bring the Petro Center into compliance with then applicable specifications and standards for Petro Center; and (e) state the actions you must take to correct operating deficiencies and the time period in which such deficiencies must be corrected.
Your right to a Renewal Term is subject to your continued compliance with all of the terms and conditions of this Agreement through the date of its expiration, in addition to your compliance with the obligations described in the Response Notice.
[Item 17: RENEWAL TERMS.]
Your right to a Renewal Term is subject to your continued compliance with all of the terms and conditions of this Agreement through the date of its expiration, in addition to your compliance with the obligations described in the Response Notice.
- 17.3 Agreements/Releases. If you satisfy all of the other conditions to the grant of a Renewal Term, you and your owners agree to sign the form of franchise agreement and any ancillary agreements we are then customarily using in connection with the grant of franchises for Petro Centers, which agreements may contain economic terms, operational requirements, and a Protected Area (if any) which differ from this Agreement. You and your owners further agree to sign general releases, in a form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees, agents, Affiliates, successors and assigns. Failure by you or your Owners to sign such agreements and releases and deliver them to us for acceptance and signature within 60 days after their delivery to you will be deemed an election not to seek a Renewal Term.
- 17.4 Training and Refresher Programs. Our grant of a Renewal Term is also conditioned on the satisfactory completion by you (or your Owners) of any new training and refresher programs regarding the Petro System or Petro System Standards as we may reasonably require.
- 17.5 Renewal Fee. You shall pay us a renewal fee of Twenty Thousand Dollars ($20,000). In addition, we have the right to charge a fee for services we render to you and expenses we incur, including but not limited to reasonable attorneys fees, in conjunction with the grant of the Renewal Term. Payment of those charges is due upon your receipt of our invoice.
- 17.6 Subsequent Renewal Terms. The fees and other conditions for any later granting of subsequent Renewal Terms will be determined by us, in our sole discretion.
- 17.7 Holdover Franchisee. If for any reason, you continue to operate the Petro Center beyond the expiration of the Term of this Agreement or any subsequent Renewal Term, you shall be deemed to be on a month-to-month basis under the terms of this Agreement and subject to termination upon 30 days' notice or as required by law. If the hold-over period exceeds 90 days, this Agreement is subject to immediate termination unless applicable law requires a longer period. During any hold-over period, the Royalty, Administrative Fee, and Monthly Advertising Fee payable by you shall each be increased by One Hundred Twenty Five Percent (125%).
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the franchise agreement outlines specific terms and conditions for renewal. Upon the agreement's expiration, a franchisee has the right to operate the Petro Center for two additional five-year periods, contingent upon substantial compliance with the existing agreement. This is based on the terms and conditions of the franchise agreement Petro Stopping Center is using when granting franchises for Petro Centers.
To secure a renewal, the franchisee must maintain possession of the Petro Center and agree to remodel or expand it as required by Petro Stopping Center to meet current specifications and standards. Alternatively, if maintaining possession is not possible, the franchisee must secure an approved substitute premises and develop it to meet the required standards before transferring operations. The franchisee must provide written notice of their intent to renew during the last year of the current term, no later than 180 days before expiration. Petro Stopping Center will then respond within 90 days, indicating whether the renewal is granted, granted with conditions to correct deficiencies, or denied.
The grant of a renewal term requires the franchisee and their owners to sign the franchise agreement and any related ancillary agreements that Petro Stopping Center is then using for new franchises, which may include different economic terms, operational requirements and protected area provisions. They must also sign general releases of claims against Petro Stopping Center. Furthermore, the franchisee must complete any new training or refresher programs that Petro Stopping Center reasonably requires. A renewal fee of $20,000 is required, along with payment for any services rendered or expenses incurred by Petro Stopping Center in connection with granting the renewal. The fees and conditions for any subsequent renewal terms will be determined by Petro Stopping Center at its sole discretion.
If a franchisee continues to operate the Petro Center after the agreement's expiration, they will be considered on a month-to-month basis, subject to termination with 30 days' notice. During this holdover period, the Royalty, Administrative Fee, and Monthly Advertising Fee will each increase by 125%.