What happens when Petro Stopping Center has no reasonable expectation of recovering a financial asset?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
All amounts which you owe us, including but not limited to all amounts due under this Agreement or under any other agreement between us or our Affiliates and you, will bear interest automatically and without notice from us, after their due date at the annual rate of eighteen 18% or the highest contract rate of interest permitted by law, whichever is less.
You acknowledge that we do not agree to accept any payments after they are due nor commit to extend credit to, or otherwise finance your operation of, the Petro Center.
Your failure to pay all amounts when due constitutes grounds for termination of this Agreement.
- 9.12 Application of Payments.
Notwithstanding any designation you might make, we have sole discretion to apply any of your payments to any of your past due indebtedness to us, including interest.
- 9.13 Payment Offsets.
We may setoff from any amounts that we may owe you any amount that you owe to us, or our Affiliates, for any reason whatsoever, including without
limitation, Royalties, Monthly Advertising Fees, and late payment interest, amounts owed to us or our Affiliates for purchases of Products or Services, or for any other reason.
Payments that we make to you may be reduced, in our discretion, by amounts that you owe to us or our Affiliates from time to time.
In particular, we may retain (or direct to our Affiliates) any amounts that we have received for your account as a credit and payment against any amounts that you may owe to us, or our Affiliates, at any time.
We may do so without notice to you at any time.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the excerpt provided does not specify what happens when Petro Stopping Center has no reasonable expectation of recovering a financial asset. However, the document does outline several financial obligations and consequences for franchisees.
The FDD details payment protocols, interest on late payments, and the application of payments. Specifically, amounts owed to Petro Stopping Center will bear interest automatically at an annual rate of 18% or the highest contract rate permitted by law. Petro Stopping Center also has the discretion to apply payments to any past due indebtedness, including interest, regardless of any designation the franchisee might make. Furthermore, Petro Stopping Center can set off any amounts owed to the franchisee by amounts the franchisee owes to Petro Stopping Center or its affiliates.
While the FDD excerpt does not directly address the scenario of unrecoverable financial assets, it does emphasize Petro Stopping Center's strict approach to financial matters, including the ability to offset payments and charge interest on late amounts. A prospective franchisee should inquire about Petro Stopping Center's policies regarding unrecoverable debts, including how they are handled in accounting and what impact they might have on the franchisee's financial standing with the company.