Can Petro Stopping Center set off any amounts they owe me against what I owe them or their Affiliates?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.13 Payment Offsets.
We may setoff from any amounts that we may owe you any amount that you owe to us, or our Affiliates, for any reason whatsoever, including without
limitation, Royalties, Monthly Advertising Fees, and late payment interest, amounts owed to us or our Affiliates for purchases of Products or Services, or for any other reason.
Payments that we make to you may be reduced, in our discretion, by amounts that you owe to us or our Affiliates from time to time.
In particular, we may retain (or direct to our Affiliates) any amounts that we have received for your account as a credit and payment against any amounts that you may owe to us, or our Affiliates, at any time.
We may do so without notice to you at any time.
However, you do not have the right to offset payments owed to us for amounts purportedly due to you from us.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, Petro Stopping Center has the right to offset any amounts they owe a franchisee against any debts the franchisee owes them or their affiliates. This includes, but isn't limited to, royalties, monthly advertising fees, late payment interest, and amounts owed for products or services. Petro Stopping Center can reduce payments to the franchisee by amounts the franchisee owes them or their affiliates. They may also retain amounts received for the franchisee's account as credit against any debts the franchisee owes to Petro Stopping Center or its affiliates. Petro Stopping Center can take these actions without prior notice to the franchisee.
However, the franchisee does not have the right to offset payments owed to Petro Stopping Center for amounts purportedly due to them from Petro Stopping Center. This creates an imbalance where Petro Stopping Center can unilaterally reduce payments to the franchisee, but the franchisee cannot do the same.
This clause is important for prospective franchisees to understand, as it gives Petro Stopping Center significant power over payments. Franchisees need to be aware that Petro Stopping Center can use any amounts they owe to offset debts, potentially impacting the franchisee's cash flow. Franchisees should maintain meticulous records and promptly address any disputes to minimize the risk of unexpected offsets. This is not uncommon in franchise agreements, but the lack of a reciprocal right for the franchisee is noteworthy.