To whom are Petro Stopping Center's payments made when using LC arrangements?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
If you desire to purchase Products or Services from us on credit, you must establish a line of credit with our, or our Affiliate's, credit department. We, in our sole discretion, shall have the right to establish (and modify or change, from time to time) the terms of credit which we offer to you. As a condition to supplying Products or Services to you on credit, we will require that you provide us with certain financial statements on a monthly basis, and we may require additional security from you and/or charge you a fee for such credit. If you fail to fulfill the terms of payment or if your financial condition deteriorates, as determined in our sole discretion, we may, without prejudice to any other lawful remedy, withhold Products and Services until payment is made, demand cash payment, demand advance payment or terminate this Agreement. We may apply any payment made by you or on your behalf to any indebtedness owed to us. No payment made to us by check or other instrument shall contain a restrictive endorsement of any kind. A restrictive endorsement shall have no legal effect, even if the instrument restrictively endorsed is processed for payment and we retain the proceeds. Among other things, we may shorten or change then-existing payment terms for your purchases of Products or Services in order to ensure that such payments are received prior to the expiration or termination of this Agreement.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Petro Stopping Center franchisees must establish a line of credit with Petro Franchise Systems LLC, or its affiliates, to purchase products or services on credit. The franchisor retains the right to set and modify the credit terms. As a condition for receiving products or services on credit, Petro Stopping Center may require franchisees to provide monthly financial statements and may also request additional security or charge a fee for the credit line.
Petro Stopping Center has the authority to withhold products and services, demand cash or advance payment, or terminate the franchise agreement if a franchisee fails to meet payment terms or if their financial condition deteriorates. Any payments made by a franchisee can be applied to any outstanding debt owed to Petro Stopping Center. Additionally, the FDD states that Petro Stopping Center will not recognize any restrictive endorsements on payments made by check or other instruments.
In the event that a franchisee seeks financing that requires Petro Stopping Center to be a party to any related documents, Petro Stopping Center retains the right to approve any provisions affecting it. The franchisee is responsible for covering all associated costs and expenses, including reasonable attorney fees, incurred by Petro Stopping Center during the review or negotiation of loan documents. The franchisee must also pay a Financing Review Fee and reimburse Petro Stopping Center for any other reasonable legal fees incurred during the review and negotiation process. Petro Stopping Center aims to complete its review of loan documents within two weeks of receiving a complete set of documents.