What is required before a Petro Stopping Center franchisee can make ownership changes?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
r claims pending or, to your knowledge, threatened against any of the foregoing and you will promptly notify us if any lawsuits, arbitrations, or claims are made, filed, or threatened against you or any of your Owners during the Term; and
- (d) you will comply with and/or assist us to the fullest extent possible in our efforts to comply with all present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any governmental authority.
- 2.3 Petro® Center Organization. If you are a Business Entity, you agree and represent that:
- (a) you have the authority to execute, deliver and perform your obligations under this Agreement and are duly organized or formed and validly existing in good standing under the laws of the state of your incorporation or formation;
- (b) that at all times during the Term of this Agreement, your organizational or governing documents will recite that the issuance and transfer of any ownership interests in you are restricted by the terms of this Agreement, and all certificates and other documents representing ownership interests in you will bear a legend referring to the restrictions of this Agreement;
- (c) the Owners Statement will completely and accurately describe all of your Owners and their interests in you. A copy of our current form of Owners' Statement is attached to this Agreement as Exhibit "A";
- (d) you and your Owners agree to revise the Owners Statement as may be necessary to reflect any ownership changes and to furnish such other information about your organization or formation as we may request (no ownership changes may be made without our prior written approval);
- (e) when you sign this Agreement, each of your Principal Owners and their spouses will sign and deliver to us our standard form of Guaranty attached to this Agreement as Exhibit "B", undertaking to be bound jointly and severally by all provisions of this Agreement and any other agreements between you and us. All Persons that become Principal Owners following the date of this Agreement and their spouses will promptly execute and deliver to us the Principal Owners Guaranty; and
(f) at our request, you will furnish true and correct copies of all documents and contracts governing the rights, obligations and powers of your Owners (including but not limited to articles of incorporation or organization and partnership, operating or shareholder agreements).
3. GRANT AND TERM.
- 3.1 Grant of Franchise. You have applied for a Franchise to own and operate a Petro Center at the Site. Reference to the Site in this Agreement includes the Petro Center. Subject to the terms of and upon the conditions contained in this Agreement, we grant you a Franchise to:
- (a) operate the Petro Center located only at the Site (and no other locations);
- (b) market the Products and Services;
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center FDD, if the franchisee is a business entity, the organizational documents must state that any ownership interest transfers are restricted by the terms of the Franchise Agreement. All documents representing ownership must also reference these restrictions. The franchisee must accurately describe all owners and their interests in an Owners Statement, and revise this statement to reflect any ownership changes. Importantly, no ownership changes can occur without Petro Stopping Center's prior written approval.
Prior to any approved transfer, the franchisee and its owners must be in full compliance with the Franchise Agreement. The prospective transferee and their owners must demonstrate good moral character, sufficient business experience, aptitude, and financial resources to meet Petro Stopping Center's standards for franchisees. All due payments and required reports must be submitted, and satisfactory payment arrangements must be made with all approved suppliers and preferred vendors.
The transferee (or its owners) must also agree to complete Petro Stopping Center's standard training program at their own expense and agree to be bound by all terms and conditions of the Franchise Agreement. These conditions ensure that any new ownership maintains the standards and obligations set forth by Petro Stopping Center.
Furthermore, any sale or transfer of a Managing Owner's interest that reduces their equity interest or voting rights below 20% is considered a transfer of interest and is subject to the terms and conditions outlined in Section 16 of the agreement. Failure to comply with these terms constitutes a default under the agreement. These stipulations are typical in franchising to maintain brand consistency and protect the franchisor's interests.