Does Petro Stopping Center have the right to restrict a franchisee's sources of materials, fixtures, and equipment?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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, they retain the right to restrict a franchisee's sources for materials, fixtures, equipment, furniture, signs, products, goods, and services, both now and in the future. This is to protect their trade secrets, ensure quality and a reliable supply of products and services that meet Petro System Standards, achieve better terms and delivery service, control the use of their Marks, and monitor the manufacture, packaging, processing, and sale of these items. If Petro Stopping Center limits the sources of these items to themselves, their affiliates, or specified exclusive or approved sources, franchisees must acquire these only from those approved sources at prices determined by Petro Stopping Center or the approved sources. Petro Stopping Center reserves the right to designate themselves or an affiliate as the sole Approved Supplier of Proprietary Supplies and/or Motor Fuel and has no obligation to evaluate or consider alternative suppliers of Proprietary Supplies or Motor Fuel.
Petro Stopping Center may require franchisees to purchase certain items, goods, products, ingredients, fixtures, furnishings, equipment, décor items, and signage from suppliers who meet the Petro System Standards, have adequate quality controls and capacity, and are approved in writing by Petro Stopping Center. These suppliers may include Petro Stopping Center or its affiliates. If a franchisee wants to purchase or lease any unapproved product, supplies, service, or equipment, or purchase approved items from an unapproved supplier, they must request approval from Petro Stopping Center in writing. Petro Stopping Center has the right to inspect the supplier's facilities and test the products, with the franchisee bearing the reasonable costs of inspection and testing.
Petro Stopping Center estimates that purchases from Approved Suppliers or designated suppliers will account for approximately 2% to 6% of the total purchases and leases needed to establish a Petro Center, and another 2% to 6% of the total purchases and leases needed to operate the Petro Center. Petro Stopping Center or its Affiliates may be designated as an Approved Supplier or the sole Approved Supplier of any item, in their sole discretion, and may derive revenue from these sales. They may also benefit from the sale or lease of goods or services to franchisees from Approved Suppliers and retain 100% of any rebates, commissions, or other consideration paid by suppliers, subject to applicable laws.