Does Petro Stopping Center have the right to limit the suppliers with whom franchisees deal in the future?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
nds of product (such as tires, motor oil, and coffee) that you must offer at your Petro Center. Although we have negotiated volume purchasing arrangements with Approved Suppliers of these products, we do not presently require you to purchase these branded products from a particular source.
We do, however, have the absolute right to limit the suppliers with whom you deal. We may restrict your sources of materials, fixtures, equipment, furniture, signs, products, goods, and services now and in the future, in order to protect our trade secrets, assure quality, assure a reliable supply of products and services that meet our Petro System Standards, achieve better terms and delivery service, control usage of the Marks, and monitor the manufacture, packaging, processing and sale of these items. If we, at our option, limit the sources of certain materials, fixtures, equipment, furniture, signs, products, goods, and services to us, or to our Affiliates and/or specified exclusive or approved sources, then you must acquire these only from these approved sources at prices we or they decide to charge. Specifically, we reserve the right to designate ourself or an Affiliate as the sole Approved Supplier of Proprietary Supplies and/or Motor Fuel and we have no obligation to evaluate or consider alternative suppliers of Proprietary Supplies or Motor Fuel. Any purchases you make from us or from our Affiliates, whether required or voluntary, may be at prices exceeding our cost.
If you desire to purchase or lease any unapproved product, supplies, service or equipment or purchase or lease any approved product, supplies, service or equipment from an unapproved supplier, you must notify us in writing and request approval. We have the right to require that our representatives be permitted to inspect the proposed supplier's facilities and test or evaluate the proposed supplier's product, supplies, service or equipment.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 37–42)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, Petro Stopping Center has the absolute right to limit the suppliers with whom franchisees deal, both now and in the future. This restriction applies to materials, fixtures, equipment, furniture, signs, products, goods, and services. The reasons for these restrictions include protecting trade secrets, assuring quality and a reliable supply of products and services that meet Petro System Standards, achieving better terms and delivery service, controlling the use of the brand's trademarks, and monitoring the manufacture, packaging, processing, and sale of these items.
Petro Stopping Center may designate itself or an affiliate as the sole approved supplier of Proprietary Supplies and/or Motor Fuel, without any obligation to consider alternative suppliers. If Petro Stopping Center limits the sources of certain items to itself, its affiliates, or specified exclusive or approved sources, franchisees must acquire these items only from those approved sources at prices determined by Petro Stopping Center or its approved suppliers. This means a franchisee may be required to purchase certain items from specific suppliers, potentially at prices exceeding Petro Stopping Center's cost.
If a franchisee wishes to purchase from an unapproved supplier, they must request approval in writing. Petro Stopping Center has the right to inspect the supplier's facilities and test their products, with the franchisee bearing the costs of inspection and testing. Petro Stopping Center will then notify the franchisee of its decision within 30 days. Even if a supplier is initially approved, Petro Stopping Center can re-inspect their facilities and re-evaluate their products, and revoke approval if the supplier fails to meet the brand's standards. This system allows Petro Stopping Center to maintain tight control over the quality and consistency of products and services offered at its locations, but it also limits the franchisee's autonomy in sourcing supplies and potentially increases their costs.
For the fiscal year ended December 31, 2024, TA Operating, an affiliate of Petro Stopping Center, had revenue from required purchases and leases by franchisees totaling $229,691. Petro Stopping Center states that purchases from approved suppliers or designated suppliers will be approximately 2% to 6% of the total purchases and leases needed to establish the Petro Center, and 2% to 6% of the total purchases and leases needed to operate the Petro Center. This highlights the financial impact of these supplier restrictions on franchisees, as a notable portion of their expenses will be directed through channels controlled or approved by Petro Stopping Center.