Owners of more than 60 AmeriStop convenience store franchises across Cincinnati and Northern Kentucky are waiting for a Thursday court hearing that could determine the future of their businesses.
In November, Petro Acquisitions Inc., the parent company of the AmeriStop chain, filed for Chapter 11 bankruptcy with debt estimated between $1 million and $100 million, according to court documents obtained by the Cincinnati Enquirer.
Thursday’s hearing in U.S. Bankruptcy Court is expected to determine whether the franchise agreement can be terminated and if the prime leases on 63 stores can be sold at auction to the highest bidder free and clear of any liens or sublease agreements, the report said. Selling of the assets would go to pay off the more than $11.2 million that Petro owes lenders, according to court documents.
Franchise owner Todd Daniels, who along with his two brothers and father own franchise rights to four stores in Cincinnati, said a decision to dissolve the franchise agreement and sell the prime leases could put him out of business. Under the franchise agreement, Daniels and other franchise owners sublease stores from Petro and, in turn, the company leases the stores from area landlords. Lease arrangements aside, all other property in the stores is owned by independent franchisees such as Daniels and his family.
"If they dissolve our franchise agreements, it basically opens up our leases to be sold to anyone, right out from underneath us," Daniels told the Enquirer. It would then be the new prime leaseholder’s decision whether to honor the previous sublease agreements, he said.
While the franchisees would have an opportunity to bid on the leases at auction, Daniels said it’s unlikely they would win. "There are plenty of big chains out there that could come in and outbid us," he said.
Losing the opportunity to operate in their current locations could severely hurt the value of the franchisees’ assets, which they have worked years to build up, Daniels argued.