What is the role of the 'Franchisee' in the Subordination Agreement for Petro Stopping Center?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
ONDITIONAL ASSIGNMENT AND ASSUMPTION OF AND AMENDMENT TO LEASE**
| THIS CONDITIONAL ASSIGNMENT AND ASSUMPTION OF AND |
|---|
| AMENDMENT TO LEASE |
| (this "Assignment") is made, entered into and effective as of the |
| effective date of the Lease (as defined hereinbelow), by, between and among PETRO |
| FRANCHISE SYSTEMS LLC, with its principal business address located at 24601 Center Ridge |
| Road, Westlake, Ohio 44145-5634 (the "Franchisor"), and whose |
| current principal place of business is (the "Franchisee"), |
| and, whose current principal place of business is |
| (the "Lessor"). |
| BACKGROUND INFORMATION |
| The |
| Franchisor |
| entered |
| into |
| that |
| certain |
| Franchise |
| Agreement |
| (the |
| "Franchise |
| Agreement") dated as of, 202 with the Franchisee, pursuant to which |
| the Franchisee plans to own and operate a Petro |
| Center (the "Petro |
| Center") located at |
| (the "Site"). |
| In addition, pursuant to that certain Lease Agreement (the "Lease"), the Franchisee has |
| leased or will lease certain land on which the Petro |
| Center is or will be located from Lessor. The |
| Franchise Agreement requires the Franchisee to deliver this Assignment to the Franchisor as a |
| condition to the grant of a franchise. |
| Pursuant to the Lease and if applicable, Lessor is undertaking development and |
| construction of the Petro Center for the Franchisee (the "Development and Construction |
OPERATIVE TERMS
The Franchisor, Franchisee, and Lessor agree as follows:
- 1. Background Information: The background information is true and correct. This Assignment will be interpreted by reference to, and construed in accordance with, the background information.
- 2. Incorporation of Terms: Terms not otherwise defined in this Assignment have the meanings ascribed to such terms in the Lease.
- 3. Indemnification of Franchisor: The Franchisee agrees to indemnify and hold the Franchisor and its Affiliates, and each of Franchisor's and its Affiliates respective officers, directors, employees, agents, representatives, successors and assigns harmless from and against any and all claims, demands, actions, causes of action, proceedings, losses, damages, injuries, liabilities, awards, judgments, settlements of damages, cost and expenses, including attorneys' fees and litigation expenses (the "Claims") based upon or arising out of Franchisee's breach of any of
Work"). the terms of the Lease, including the failure to pay rent or any other terms and conditions of the Lease.
4. Conditional Assignment and Assumption:
- (a) The Franchisee hereby grants to the Franchisor a security interest in and to the Lease, all of the furniture, fixtures, inventory and supplies located in the Site and the franchise relating to the Petro Center, and all of the Franchisee's rights, title and interest in and to the Lease as collateral for the payment of any obligation, liability or other amount owed by the Franchisee or its Affiliates to the Lessor arising under the Lease and for any default or breach of any of the terms and provisions of the Lease, and for any default or breach of any of the terms and provisions of the Franchise Agreement. This Assignment shall constitute a lien on the interest of the Franchisee in and to the Lease until satisfaction in full of all amounts owed by the Franchisee to the Franchisor. Franchisee agrees to execute any and all Uniform Commercial Code financing statements and all other documents and instruments deemed necessary by Franchisor to perfect or document the interests and assignments granted herein.
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 Franchisee is a key party in the Conditional Assignment and Assumption of Lease, also referred to as the Subordination Agreement. The Franchisee's role involves several critical aspects related to the lease of the property where the Petro Stopping Center will operate. The agreement is made among Petro Franchise Systems LLC (the Franchisor), the Franchisee, and the Lessor (the property owner).
The Franchisee is required to deliver the Assignment to Petro Stopping Center as a condition of being granted the franchise. The Franchisee leases land from the Lessor on which the Petro Stopping Center is or will be located. Additionally, the Franchisee grants Petro Stopping Center a security interest in the lease, furniture, fixtures, inventory, supplies at the site, and the franchise itself. This security interest serves as collateral for any obligations the Franchisee owes to the Lessor under the lease, or for any breaches of the lease or the Franchise Agreement.
Furthermore, the Franchisee agrees to indemnify Petro Stopping Center against any claims arising from the Franchisee's breach of the lease terms, including failure to pay rent. The Franchisee must also execute any Uniform Commercial Code financing statements or other documents necessary to perfect the interests and assignments granted in the agreement. Overall, the Franchisee's role in the Subordination Agreement is to secure the lease and ensure compliance with both the lease terms and the Franchise Agreement, protecting Petro Stopping Center's interests in the operation of the franchise.