Are managers of the Petro Stopping Center required to have any equity in the franchisee?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
You must designate an individual to serve as the managing Owner of your Petro Center (the "Managing Owner"). The Managing Owner must have a 20% equity interest in you (if you are an entity) or the Petro Center (if you are individuals), be approved by us, and complete all of our training requirements regarding the Petro System and Petro System Standards. The Managing Owner must devote full time and best efforts to the management and supervision of your employees and the Petro Center. The Managing Owner must have the power to bind you in all dealings with us. If you or your affiliates are developing and operating multiple Petro Centers, you need designate only one Managing Owner for your or your affiliates' operation, not one for each Petro Center.
You must also have managers, as specified in the Manuals, who directly supervise and control the Petro Center on a day-to-day basis. You must keep Petro Franchise informed of the identities of your manager(s) within seven days of their becoming manager(s). Your managers need not have any equity in the franchisee. The managers and their replacements must successfully and promptly complete all of our training programs.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 66)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center FDD, managers are not required to have equity in the franchisee. However, the Managing Owner of a Petro Stopping Center is required to have a minimum equity stake.
The FDD specifies that the Managing Owner must have at least a 20% equity interest in the franchisee if the franchisee is an entity, or in the Petro Center itself if the franchisee is an individual. This Managing Owner must be approved by Petro Stopping Center and complete all required training programs. They are responsible for the full-time management and supervision of employees and the Petro Center, and they must have the authority to bind the franchisee in dealings with Petro Stopping Center.
In contrast, the managers who directly supervise and control the Petro Stopping Center on a day-to-day basis are not required to have any equity in the franchisee. Petro Stopping Center must be informed of the identities of these managers, and the managers must complete all required training programs. This distinction between the Managing Owner and the day-to-day managers is important for prospective franchisees to understand, as it clarifies the equity requirements for different roles within the franchise operation.