Does the issuance of additional securities representing an ownership interest in a Petro Stopping Center franchise require franchisor approval?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
(ii) merger or consolidation or issuance of additional securities or interests representing an ownership interest in you;
(d) you and your Owners agree to revise the Owners Statement as may be necessary to reflect any ownership changes and to furnish such other information about your organization or formation as we may request (no ownership changes may be made without our prior written approval);
(b) that at all times during the Term of this Agreement, your organizational or governing documents will recite that the issuance and transfer of any ownership interests in you are restricted by the terms of this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to the restrictions of this Agreement;
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, the issuance of additional securities or interests representing an ownership interest in the franchisee does require franchisor approval. Specifically, if the franchisee is a business entity, the organizational documents must state that the issuance and transfer of any ownership interests are restricted by the terms of the Franchise Agreement.
Petro Stopping Center requires prior written approval before any ownership changes can be made. The franchisee and their owners must revise the Owners Statement to reflect any ownership changes and furnish any other information about the organization that Petro Stopping Center requests. Furthermore, all certificates and other documents representing ownership interests must bear a legend referring to the restrictions of the Franchise Agreement.
This requirement allows Petro Stopping Center to maintain control over who its franchisees are and ensures that all owners meet their standards. It also protects the integrity of the Petro Stopping Center brand by ensuring that all owners are committed to the franchise system and adhere to the franchise agreement. A prospective franchisee should carefully consider these restrictions and approval processes before entering into a franchise agreement with Petro Stopping Center.