ABOUT PMPA
PMPA LITIGATION OF TERMINATION OR NON-RENEWAL CASES.
PETROLEUM MARKETING PRACTICES ACT
Barr & Morgan has proudly influenced legislation, legal decisions & petroleum policy standards for the past 50 years
One of Barr & Morgan’s most important areas of practice is defending gasoline dealers from attempted terminations or non-renewals by their suppliers. We recognize that a termination or non-renewal letter can be one of the most traumatic events of a dealer’s life. We know that if the defense is not handled with the greatest care and skill, the dealer’s business may well be at an end. It can be “life or death” for the business. We understand that your gasoline business or convenience store is probably the support for you, your family and many of your employee’s families.
TERMINATION OR NON-RENEWAL
The Petroleum Marketing Practices Act (PMPA) prohibits states and their political subdivisions from adopting or enforcing any law concerning the termination or non-renewal of a franchise unless its provisions are the same as the provision in the PMPA. Further, states may not adopt laws that require a goodwill payment on the termination or non-renewal of a franchise by a supplier.
The act states that it does not (1) authorize or prohibit a transfer or assignment of a franchise allowed by the franchise or by state law or (2) prohibit states from specifying terms and conditions under which a franchise may be transferred to a designated successor upon the franchisee’s death.
THE PETROLEUM MARKETING PRACTICES ACT
Title I of the Petroleum Marketing Practices Act (PMPA) sets certain requirements for the contracts between gasoline refiners or distributors and their retailers. It prohibits franchisors from terminating a franchise, or failing to renew one, except in accordance with its provisions. It is intended to protect distributors and retailers.
A supplier may terminate a franchise only for certain reasons such as the franchisee’s failure to make a good faith effort to carry out the terms of the franchise or if the supplier loses the right to grant use of the trademark under which the gasoline is sold.
A supplier may choose not to renew a franchise for all of the reasons it may terminate a franchise and for certain other additional reasons. These include the franchisee’s failure to agree to certain additional franchise terms or if the franchisee has a record of numerous customer complaints.