Under what circumstances does Petro Stopping Center have the option to purchase my Petro Center?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
ion. You and your Owners expressly acknowledge that you possess skills and abilities of a general nature and have other opportunities for exploiting such skills. Consequently, enforcement of the covenants made in this Section will not deprive you of your personal goodwill or ability to earn a living.
(b) Post-Term Covenant Not to Solicit. You and your Owners agree that, for a period of 2 years commencing on the effective date of termination or expiration of this Agreement, or the date on which a Person restricted by this Section begins to comply with this Section, whichever is later, neither you nor any of your Owners will entice or induce or in any manner influence any Person, who is in our or our Affiliates' employ at a management level, to leave such employ or discontinue such service.
19.5 Our Right to Purchase.
- (a) Exercise of Option. Upon our termination of this Agreement in accordance with its terms and conditions, or your termination of this Agreement without cause or the expiration of this Agreement, we have the option, exercisable by giving written notice to you within 60 days after the date of such termination, to purchase your Petro Center (including all or any portion of the real property related to the Petro Center) from you, including the ownership or leasehold rights to the Site. The date on which we notify you whether or not we are exercising our option is referred to in this Agreement as the "Notification Date". We have the unrestricted right to assign this option to purchase your Petro Center. We will be entitled to all customary warranties and representations in connection with our asset purchase, including, without limitation, representations and warranties as to ownership and condition of and title to assets; liens and encumbrances on assets; validity of contracts and agreements; and liabilities affecting the assets, contingent or otherwise.
- (b) Leasehold Rights. If we exercise the option to purchase your Petro Center as described above, then you agree at our election:
- (i) to assign your leasehold interest in the Site to us (for no additional consideration and at no additional cost to us); or
- (ii) to enter into a sublease for the remainder of the lease term on the same terms (including renewal options) as the prime lease (at no additional cost to us).
- (c) Purchase Price. The purchase price for your Petro Center under this Section will be the fair market value ("Fair Market Value") of the Petro Center exclusive of any goodwill, determined in a manner consistent with reasonable depreciation of the Petro Center's equipment, signs, inventory, materials and supplies, provided that the Petro Center will be valued as an independent business and its value will not include any value for:
- (i) the Franchise or any rights granted by this Agreement;
- (ii) the Marks or Copyrights; or
- (iii) participation in the System.
We may exclude from the assets purchased cash or its equivalent and any Operating Assets, such as equipment, signs, inventory, materials and supplies that are not reasonably necessary (in function or quality) to the Petro Center's operation or that we have not approved as meeting standards for Petro Centers, and the purchase price will reflect such exclusions.
- (d) Appraisal.
Source: Item 17 — RENEWAL TERMS. (FDD pages 208–228)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, Petro Stopping Center has the option to purchase your Petro Center under specific circumstances related to the termination or expiration of the franchise agreement. Petro Stopping Center can exercise this option if they terminate the agreement according to its terms, or if you terminate the agreement without cause, or upon the expiration of the agreement. To exercise this option, Petro Stopping Center must provide you with written notice within 60 days after the date of termination. This purchase option extends to the entire Petro Center, including any real property or leasehold rights associated with the site. Petro Stopping Center also has the right to assign this purchase option to another party.
If Petro Stopping Center chooses to purchase your Petro Center, the purchase price will be based on the fair market value of the center, excluding any goodwill. The valuation will consider the reasonable depreciation of equipment, signs, inventory, materials, and supplies. However, the valuation will not include any value associated with the franchise itself, the trademarks or copyrights, or participation in the Petro Stopping Center system. This valuation approach ensures that you are compensated for the tangible assets of the business, but not for the brand value or franchise rights.
In the event that Petro Stopping Center exercises its option to purchase the Petro Center, you are obligated to either assign your leasehold interest in the site to them at no additional cost, or enter into a sublease for the remainder of the lease term under the same terms as the original lease, also at no additional cost to Petro Stopping Center. This provision ensures a smooth transition of the site's control to Petro Stopping Center. The FDD specifies that Petro Stopping Center is entitled to customary warranties and representations related to the asset purchase, covering aspects such as ownership, condition, title to assets, liens, validity of contracts, and liabilities.
If you and Petro Stopping Center cannot agree on the fair market value of your Petro Center within ten days of the notification date, an independent appraiser will determine the fair market value. Both you and Petro Stopping Center must agree on the appraiser within ten days of failing to agree on the fair market value. If you and Petro Stopping Center cannot agree on an independent appraiser, each party will choose a certified public accounting firm, and those two firms will select a mutually acceptable appraisal firm to conduct the independent appraisal. The appraiser must have at least ten years of experience valuing similar properties, and the individual valuing the real estate must be a Member Appraisal Institute (MAI) appraiser. You and Petro Stopping Center will each bear one-half of the appraiser's costs.