Can Petro Stopping Center freely transfer the Franchise Agreement?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.1 By Us. This Agreement is fully transferable by us and will inure to the benefit of any transferee or other legal successor to our interests.
- 16.2 By You. You understand and acknowledge that the rights and duties created by this Agreement are personal to you (or, if you are a Business Entity, to your Owners) and that we have granted the Franchise to you in reliance upon our perceptions of your (or your Owners') individual or collective character, skill, aptitude, attitude, business ability and financial capacity. Accordingly, neither this Agreement (nor any interest in it) nor any ownership or other interest in you or the Petro Center or other aspect of the Petro Center may be transferred without our prior written approval, which may be given or withheld in our sole discretion. Any transfer without such approval constitutes a breach of this Agreement and is void and of no effect. As used in this Agreement, the term "transfer" includes your (or your Owners') voluntary, involuntary, direct or indirect assignment, sale, gift or other disposition of any interest in: (a) this Agreement; (b) you; (c) the Petro Center; (d) the Site; or (e) the Operating Assets. A transfer of ownership, possession or control of the Petro Center or the Operating Assets may only be made in conjunction with an approved transfer of this Agreement.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, Petro Franchise Systems LLC has the right to transfer the Franchise Agreement. Specifically, the agreement is fully transferable by Petro Stopping Center, and the transfer will benefit any transferee or legal successor to their interests.
However, franchisees do not have the same freedom. The document states that the franchisee's rights and duties are personal, and the franchise was granted based on the franchisor's perception of the franchisee's character, skills, aptitude, business ability, and financial capacity. Therefore, franchisees must obtain prior written approval from Petro Stopping Center to transfer the agreement, any interest in it, or any ownership interest in the Petro Center. This approval can be withheld at Petro Stopping Center's discretion. Any transfer without this approval is considered a breach of the agreement and is void.
The term "transfer" is broadly defined and includes any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the agreement, the franchisee, the Petro Center, the site, or the operating assets. Transferring ownership, possession, or control of the Petro Center or its operating assets can only occur with an approved transfer of the Franchise Agreement. This ensures Petro Stopping Center maintains control over who operates its franchises and upholds brand standards.