Petroleum Retail Marketing Franchise Act 1980

What this law does:

This Act protects petrol station operators (called franchisees) in their business dealings with oil companies and suppliers (called franchisors). It ensures fair treatment when someone operates a service station under a corporate brand.

Key protections:

• Security of tenure: Franchisors generally cannot terminate agreements without good reason. They must renew franchise agreements (usually for at least 3 years) and can only end them for specific grounds like fraud, serious safety breaches, or failure to operate the business.
• Fair contracts: Franchisors cannot impose impossible or unreasonably harsh obligations. They must provide detailed written information about costs, profitability, and rights at least 3 business days before the franchisee signs.
• Right to sell: Franchisees can sell their business to family members, experienced operators, or others. The franchisor cannot unreasonably refuse consent, though they have the right to buy the business themselves at the same price offered to others.
• Fuel supply: Franchisors must supply the fuel the station reasonably needs and cannot discriminate between franchisees by charging different prices without justification (such as different transport costs).
• Compensation: If a franchisor breaks the law or terminates the agreement unfairly, the franchisee can claim compensation, including for lost goodwill and unused stock.