What is the relationship between the Loan and the Lender Mortgage for Petro Stopping Center?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Prior to Lender commencing any remedy under the Loan Documents, Lender shall provide to Franchisor written notice of the default which would permit the Lender to commence such remedy, whether or not Lender is obligated to give notice thereof to Franchisee (each, a "Loan Default Notice") and shall permit Franchisor an opportunity, to be exercised in Franchisor's sole discretion, to cure such default in accordance with the provisions of this Section 3.
If the default is: (a) a payment default, or (b) any other monetary default, Franchisor shall have until seven (7) calendar days after the later of: (i) the receipt by Franchisor of the Loan Default Notice, and (ii) the expiration of Franchisee's cure provision, if any, (in either event, an "Extended Monetary Cure Period") to cure such monetary default.
In the event Franchisor elects to cure any such monetary default: (x) Franchisee shall defend and hold harmless Lender for all costs, expenses, losses, liabilities, obligations, damages, penalties, costs, and disbursements impos
Source: Item 4 — Other Owners: (FDD pages 228–302)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, the franchisor has certain rights and responsibilities regarding any loan and associated mortgage obtained by a franchisee. Specifically, before a lender can act on any default under the loan, they must provide written notice to Petro Stopping Center. This notice must detail the default that would allow the lender to begin their remedies, regardless of whether the lender is obligated to notify the franchisee.
Petro Stopping Center then has the option, at its discretion, to correct the default. If the default involves payment or any other monetary issue, Petro Stopping Center has until seven calendar days after receiving the lender's notice or the expiration of the franchisee's cure period, whichever is later, to resolve the monetary default. This is referred to as an 'Extended Monetary Cure Period.'
If Petro Stopping Center chooses to cure the monetary default, the franchisee is responsible for defending and protecting the lender from any costs, expenses, losses, liabilities, obligations, damages, penalties, and disbursements. This arrangement ensures that Petro Stopping Center has an opportunity to intervene and protect its brand and the stability of its franchise locations, while also placing the responsibility for financial obligations on the franchisee.