Assigning Your Fuel Supply Agreement: Branded, Unbranded, and Jobber Terms

Who is actually party to the fuel agreement?

Start with every document, not the name used in conversation. The station may have a supply agreement with a distributor, a separate brand or trademark agreement, equipment documents, an incentive agreement, a deed restriction, a lease, and personal guarantees. Amendments, renewals, side letters, and account statements can change the original contract.

The Petroleum Marketing Practices Act defines a distributor as a person that purchases motor fuel for sale, consignment, or distribution to another, with stated exceptions. It defines a retailer as a person purchasing motor fuel for sale to the public for ultimate consumption. 15 U.S.C. 2801 also describes certain motor-fuel trademark and supply arrangements within its franchise definitions.

The contract party, guarantor, trademark rights, equipment owner, and real estate owner may be different people or entities.

How do branded and unbranded supply differ in a sale?

A branded arrangement can include trademark use, image standards, approved products, payment systems, loyalty programs, inspections, signage, and site requirements in addition to fuel supply. The brand can support customer recognition and operating systems. It can also limit supplier choice and require consent or capital work.

An unbranded agreement can provide more flexibility in sourcing and site presentation, but the contract may still include term, volume, pricing, exclusivity, equipment, security, credit, and assignment obligations. Unbranded does not mean unrestricted.

A buyer should understand what it receives on closing day. If the brand cannot continue, the budget and transition need to include debranding, signage, pump appearance, payment systems, permits, inventory, customer communication, and any contract payment.

Which pricing terms matter to a buyer?

Read the defined price, delivery point, freight, taxes, fees, payment timing, credit terms, security, electronic draft rights, shortages, product specifications, and dispute process. A formula that refers to a rack, posting, zone, index, or supplier schedule needs the exact referenced source and adjustment.

Compare invoices and account statements with the contract. Confirm whether rebates, allowances, prompt-pay discounts, card programs, freight, equipment charges, or other credits are included in reported fuel margin. A buyer will normalize economics that depend on the current owner's credit, volume across other sites, or a nontransferable program.

The seller should not describe the contract as favorable without showing the formula and actual settlement records. Historical margin alone does not prove the buyer will receive the same terms.

How do term and volume obligations affect transfer?

Record the start date, expiration date, renewal method, notice periods, exclusivity, minimum purchase or throughput obligations, allocation rules, force majeure, and remedies. If a multi-site agreement measures volume across a group, selling 1 site can affect the remaining locations as well as the transferred store.

Compare required volume with actual purchases by period and site. Identify deficiencies, waivers, disputes, and how damages or repayment are calculated. Do not assume a buyer can simply take over the remaining term. The supplier may underwrite credit, operating experience, brand compliance, and real estate control before consenting.

For a portfolio, build a contract matrix by site. One agreement may cover the whole group while others are location specific. The sale structure should not separate sites without testing the contract consequences.

What happens to brand funding, signage, and equipment?

Identify every payment or asset provided by the supplier or brand. The documents may cover canopy, signs, dispensers, point-of-sale hardware, payment systems, imaging work, tanks, loans, rebates, or other incentives. Determine who owns each item and whether the amount is earned over time, forgiven, amortized, secured, or repayable after a sale, termination, volume shortfall, or debrand.

Ask for a current written payoff or obligation statement when the agreement permits one. Reconcile it with the contract and seller's ledger. A buyer needs to know whether it will own, lease, replace, or continue using the equipment.

A supplier's lien or security interest can affect closing. Include lien searches, releases, payoff instructions, and equipment serial numbers in the closing plan.

What should assignment and change-of-control language say?

Read the definition of assignment. Some contracts cover a direct assignment of the agreement, sale of the business, transfer of the real estate, change in ownership or control, lease change, or transfer to an affiliate. The consent standard may be discretionary or tied to stated conditions.

List the documents and information the supplier requires from the buyer. These may include ownership, financial capacity, experience, credit, insurance, licenses, site control, and signed assumption or new agreements. Build that process into the LOI and purchase agreement.

A stock or membership-interest sale can still trigger fuel-contract consent when the agreement treats a change of control as an assignment.

Does the Petroleum Marketing Practices Act control the transfer?

The PMPA can apply to certain motor-fuel franchise relationships and addresses termination and nonrenewal, among other provisions. It does not make every fuel agreement freely assignable and does not replace the contract or applicable state law. The federal definition expressly references transfers or assignments authorized by the franchise or applicable state law.

Do not use a general summary to make a legal conclusion about a specific brand, distributor, dealer, or jobber arrangement. Identify which documents form the relationship, the parties' roles, the trademark rights, the premises, and the requested transfer. Then review the actual notice, consent, termination, and remedy provisions.

A buyer and seller can agree on closing terms, but they cannot force a nonparty to give a consent or new contract it has not approved.

What should be in the fuel-contract diligence file?

Build the file before a buyer signs an LOI. The table below keeps legal documents, operating evidence, money, and transfer steps connected.

Use the complete contract and current written counterparty information for the specific site.

How do you separate a portfolio covered by shared supply contracts?

Start with a site schedule tied to every governing agreement. Show which locations share volume commitments, pricing, credit, collateral, brand funding, equipment, guarantees, rebates, delivery routes, or default provisions. A buyer of 1 location needs to know whether the supplier can release that site without changing obligations across the remaining group.

Model the seller's position after the carve-out. Removing a high-volume site can affect pricing or a group commitment. Shared collateral or a cross-default can prevent a clean release. An incentive may have been calculated for the whole network even if the equipment sits at 1 store.

If the group may sell to several buyers, sequence the consents and closings. The first transfer should not consume a release, brand right, volume credit, or equipment allocation needed for another site. Require written counterparty statements that address the proposed structure, not a generic confirmation that the account is current.

A portfolio carve-out is incomplete until the supplier confirms how shared volume, collateral, funding, and defaults are treated after the transfer.

For a whole-group sale, confirm whether the buyer assumes the master agreement, enters a new one, or takes sites under separate contracts. That choice can affect value, financing, timing, and the operating handoff.

Map who receives any final rebate, credit, or reconciliation after closing. The economic cutover should match the delivery records and contract assignment date.

How should the fuel agreement be handled at closing?

The purchase agreement should make the intended treatment explicit. The buyer may assume the agreement, sign a new agreement, acquire the station without the brand, or close only after a consent or payoff. Define who obtains approval, who pays amounts due, what happens if consent is denied, and whether closing can occur without it.

Coordinate final deliveries, fuel inventory, account cutover, credit, electronic payment, fuel-rating records, signage, loyalty programs, card processing, and access to supplier systems. FTC guidance on the Fuel Rating Rule explains that distributors and retailers have certification, posting, and recordkeeping duties in the fuel distribution chain.

You may not need a broker when the buyer and supplier path are already known, but you still need a complete contract review and controlled consent process.

Have an attorney familiar with petroleum contracts review the agreement and transfer before you sign the sale documents.