How is the Monthly Advertising Fee adjusted each calendar year for a Petro Stopping Center?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Ongoing Royalty Fees | You must pay us (i) 4.5% of all Non-QSR Gross Sales up to and including Six Hundred Thousand Dollars ($600,000) per month (the "Threshold Amount") and 2% of all Non QSR Gross Sales in excess of the Threshold Amount; (ii) 2% of all QSR Gross Sales; and (iii) $.007 on each gallon of Motor Fuel sold at your Petro Center1 | Payable monthly 10 business days following the Report Day by electronic funds transfer | Each calendar year the Threshold Amount will be increased by using the CPI Adjustment. You are not required to pay any Royalty under the Franchise Agreement, with respect to Gross Sales derived from a food concept that you operate at the Petro Center pursuant to a separate franchise or license agreement with us or our Affiliates, if such separate franchise or license agreement requires payment of royalties to us or our Affiliates. |
| Administrative Fee | You must pay us 0.3% of all Non-Fuel Gross Sales up to and including Six Hundred Thousand Dollars ($600,000) per month (the "Administrative Threshold Amount"). | Payable monthly 10 business days following the Report Day by electronic funds transfer | Each calendar year the Administrative Threshold Amount will be increased by using the CPI Adjustment. |
| Advertising Fees | Currently $3,000 per month | Payable on the first full calendar month after opening your franchise and continuing on a monthly basis |
Source: Item 6 — OTHER FEES (FDD pages 27–32)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the Monthly Advertising Fee is subject to an annual adjustment. The FDD states that each calendar year, the Monthly Advertising Fee will be increased by using the CPI Adjustment. The CPI Adjustment refers to the Consumer Price Index, a common economic indicator used to measure inflation.
This means that the base advertising fee, currently $3,000 per month, will likely increase each year to account for changes in the cost of goods and services. However, the agreement also stipulates that in no event will the Monthly Advertising Fee be less than the then-current Monthly Advertising Fee. This clause ensures that the fee will not decrease, even if the CPI Adjustment were to be negative in a given year.
For a prospective Petro Stopping Center franchisee, this means budgeting for a gradually increasing advertising expense over the term of the franchise agreement. While the CPI Adjustment is intended to reflect real-world cost increases, it's important to understand how this adjustment is calculated and applied to the fee. Franchisees should inquire about the historical CPI adjustments and how they have impacted the advertising fee in previous years to better forecast future costs.