Petro Stopping Centers Franchise

Financing Details

Petro Franchise Systems LLC does not offer any direct or indirect financing to its franchisees. Additionally, the franchisor does not guarantee any franchisee notes, leases, or other obligations.

Litigation Summary

Petro Franchise Systems LLC itself has no pending or concluded litigation. However, its parent and affiliated entities, including BP Corporation North America Inc., have a significant history of litigation, with several notable cases still ongoing or recently resolved. Major ongoing litigation for Petro Franchise Systems LLC's parent and affiliates includes: 1. **Gulf of Mexico Oil Spill (Deepwater Horizon)**: While some class actions, such as securities cases, were closed in 2021, various claims related to the 2010 Deepwater Horizon incident remain active. As of January 2025, there are 22 pending personal injury lawsuits brought by class members and an additional 38 pending lawsuits for post-explosion clean-up, medical monitoring, or personal injury, with some trials scheduled for 2025. Complex class actions in Mexican Federal District Courts, seeking penalties, damages, and environmental remediation for alleged harm in Mexico, are also still being contested through appeals as recently as December 2024. 2. **Natural Gas Market Manipulation**: An appeal is pending with the US Court of Appeals for a case initiated by the US Federal Energy Regulatory Commission (FERC) against BP America Inc. and affiliates. This case alleges natural gas market manipulation in 2008. While an administrative ruling and FERC affirmation occurred earlier, an appeal was filed, and oral arguments were heard in early 2022, with a decision expected later that year, indicating ongoing active litigation. 3. **Climate Change Lawsuits**: BP p.l.c. and its US affiliates are co-defendants in approximately 30 lawsuits filed by various governmental and private parties. These cases generally assert claims related to climate change impacts and allegations of deceptive communication, seeking substantial monetary and equitable relief. These lawsuits are still in relatively early stages. 4. **Louisiana Coastal Restoration**: Various BP entities are defendants in over 40 lawsuits filed by coastal parishes and the State of Louisiana, plus 4 private landowner claims (BP is a defendant in two of these). These lawsuits allege damages from historical oil and gas operations causing coastal erosion and seek remediation costs and natural resource damages. Some of these cases are proceeding in state courts, and a settlement for one parish was reached in late 2023. Other past litigations involving affiliates, such as those concerning California underground storage tank (UST) violations, US Commodity Futures Trading Commission (CFTC) propane manipulation, and class actions related to fuel temperature expansion, were concluded and settled in earlier periods (2016-2018).

Renewal Conditions

To renew their franchise, Petro Franchise Systems LLC franchisees can opt for two additional five-year terms. They must first provide written notice of their intent to renew at least 180 days before their current agreement expires. Renewal is contingent upon full compliance with the existing Franchise Agreement, including having no outstanding defaults or monetary obligations to Petro Franchise Systems LLC or its affiliates. Franchisees are also required to sign Petro Franchise Systems LLC's then-current franchise agreement and other ancillary agreements, which may feature different economic terms, operational requirements, and protected area provisions. Furthermore, franchisees must meet current qualification and training requirements for the Petro System and its standards, and sign a general legal release. Petro Franchise Systems LLC will respond within 90 days, potentially requiring the franchisee to undertake facility remodeling or expansion to align with current brand specifications and correct any operational deficiencies within a specified timeframe. A renewal fee of $20,000, plus reimbursement for any services and expenses incurred by Petro Franchise Systems LLC for the renewal process, is also due.

Staffing Notes

Petro Franchise Systems LLC requires a Managing Owner for each Petro Center who must hold at least a 20% equity interest, be approved by the franchisor, and complete all required training. This Managing Owner is expected to devote full time and best efforts to the management and supervision of the Petro Center and its employees. For franchisees operating multiple Petro Centers, one Managing Owner can oversee all locations. Additionally, each Petro Center must have other managers, as specified in the operations Manuals, who are responsible for direct day-to-day supervision and control. These managers do not need an equity stake but must complete the franchisor's training and be approved. All personnel must comply with applicable laws and franchisor requirements, and any employees with access to confidential information, including managers, must sign a Confidentiality Agreement.