How does Petro Stopping Center manage foreign currency exchange risk?

According to Petro Stopping Center's 2025 Franchise Disclosure Document, the company addresses foreign currency exchange risk through specific strategies. The document states that Petro Stopping Center is exposed to fluctuations in foreign currency cash flows, primarily related to transactions in currencies other than the functional currency of certain subsidiaries. To mitigate this risk, the management assesses foreign currency risk based on both transactional cash flows and translational volatility.

To reduce the impact of these fluctuations, Petro Stopping Center enters into currency swaps to manage net long or short currency positions. These foreign currency contracts are valued using an income approach, which involves calculating the difference between forward rates and the contract rate, multiplied by the notional value. This valuation method helps the company understand and manage the financial implications of currency movements.

In practical terms, this means that Petro Stopping Center actively monitors and manages its exposure to foreign currency fluctuations by using financial instruments like currency swaps. By engaging in these practices, Petro Stopping Center aims to stabilize its financial performance and reduce the uncertainty associated with international transactions for both the company and its franchisees.