Under what conditions can a Petro Stopping Center franchisee assign the Franchise Agreement?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
- **8.
No Subordination**: The Franchisee shall not permit the Lease to become subordinate to any lien without first obtaining Franchisor's written consent, other than the lien created by this Assignment, the Franchise Agreement, the Lessor's lien under the Lease or state law, liens securing bank financing for the operations of Franchisee on the Site and the agreements and other instruments referenced herein.
Neither the Lessor nor the Franchisee may terminate, modify or amend any of the provisions or terms of the Lease without the prior written consent of the Franchisor.
Any attempt at termination, modification or amendment of any of the terms without such written consent is null and void.
- **9.
Exercise of Remedies**: In any case of default by the Franchisee under the terms of the Lease or under the Franchise Agreement, the Franchisor shall be entitled to exercise any one or more of the following remedies in its sole discretion:
(a) to take possession of the Site, or any part thereof, personally, or by its agents or attorneys;
(b) to, in its discretion, without notice and with or without process of law, enter upon and take and maintain possession of all or any part of the Site, together with all furniture, fixtures, inventory, books, records, papers and accounts of the Franchisee;
(c) to exclude the Franchisee, its agents or employees from the Site;
(d) as attorney-in-fact for the Franchisee, or in its own name, and under the powers herein granted, to hold, operate, manage and control the Petro Center and conduct the business, if any, thereof, either personally or by its agents, with full power to use such measures, legally rectifiable, as in its discretion may be deemed proper or necessary to cure such default, including actions of forcible entry or detainer and actions in distress of rent, hereby granting full power and authority to the Franchisor to exercise each and every of the rights, privileges and powers herein granted at any and all times hereafter;
(e) to cancel or terminate any unauthorized agreements or subleases entered into by the Franchisee, for any cause or ground which would entitle the Franchisor to cancel the same;
Source: Item 4 — Other Owners: (FDD pages 228–302)
What This Means (2025 FDD)
Based on the 2025 Petro Stopping Center Franchise Disclosure Document, a franchisee's ability to assign the Franchise Agreement is subject to specific conditions and restrictions. The franchisee grants Petro Franchise Systems LLC a security interest in the lease, furniture, fixtures, inventory, supplies, and the franchise itself as collateral. This collateral secures any obligations the franchisee owes to the lessor under the lease agreement, as well as any defaults or breaches of the lease or the Franchise Agreement. This arrangement gives Petro Stopping Center significant control over the franchise's assets and operations.
Furthermore, the franchisee must obtain written consent from Petro Stopping Center before allowing the lease to become subordinate to any lien, with limited exceptions such as liens created by the assignment itself, the Franchise Agreement, the lessor's lien, state law, or liens securing bank financing for the operations. Petro Stopping Center also retains the right to exercise various remedies in case of default by the franchisee, including taking possession of the site, operating the Petro Center, and canceling unauthorized agreements. These provisions ensure that Petro Stopping Center maintains control over the franchise location and operations, even in situations where the franchisee is in default.
While the excerpts detail the conditional assignment and the franchisor's rights in case of default, they do not explicitly state the conditions under which a franchisee can assign the Franchise Agreement to a third party. A prospective franchisee should seek clarification from Petro Stopping Center regarding the specific procedures and requirements for assigning the Franchise Agreement, including any potential transfer fees, qualifications of potential assignees, and the franchisor's approval process.