Petroleum Marketing Practices Act (PMPA)

The Petroleum Marketing Practices Act is the main federal law that protects gas-station franchisees from arbitrary termination or nonrenewal by refiners and branded fuel suppliers. Congress enacted it in 1978 after finding that service-station operators were unusually vulnerable to losing their leases (see Motor Fuel Marketing Subsidization for the related competition-study provisions enacted around the same time), fuel supply, or trademark rights with little bargaining power to resist. The PMPA does not eliminate franchisor control, and it does not make every station relationship permanent. What it does is force franchisors to fit termination and nonrenewal decisions into specified statutory grounds, give written notice, and face fast federal-court challenges if they do not comply.

Current Law (2026)

Legal Authority

• 15 U.S.C. § 2801 — Defines key terms including franchise, franchise relationship, franchisor, franchisee, and marketing premises
• 15 U.S.C. § 2802 — General prohibition on termination and nonrenewal except on specified statutory grounds
• 15 U.S.C. § 2804 — Notice requirements for termination or nonrenewal
• 15 U.S.C. § 2805 — Franchisee enforcement rights, including civil actions and preliminary injunctions

Key Numbers

• Gas station universe: approximately 112,000 gas stations in the U.S. (2023 industry data); approximately 60% are branded franchise stations operating under supplier brand names (Shell, ExxonMobil, BP, Chevron, etc.) — these are the stations whose termination and nonrenewal rights are governed by the PMPA
• Standard notice: 90 days' written notice is the PMPA's baseline for termination or nonrenewal; some market-withdrawal scenarios require up to 1 year's notice under specific statutory provisions
• Franchisee damages for willful violations: a franchisee who wins a PMPA suit for a willful violation can recover actual damages plus exemplary (punitive) damages up to $10,000/violation or 3× actual damages, whichever is greater, plus attorney's fees — making litigation risk real for franchisors who procedurally mishandle terminations
• Typical franchise term: fuel supply and premises lease arrangements typically run 1-5 years; multi-year extensions are common but not automatic; the nonrenewal provisions are triggered at the end of each term
• EV pressure: approximately 70,000+ public EV chargers were operational in the U.S. as of early 2026; branded fuel suppliers are increasingly conditioning franchise renewals on EV infrastructure investment, creating new PMPA interpretive questions about whether such requirements constitute new franchise obligations outside the original agreement

How It Works

PMPA draws a legally significant line between termination (ending the franchise before the term expires) and nonrenewal (declining to continue it at the term's end) — both require the franchisor to fit the decision into a statutorily recognized category, not just invoke business judgment. The default notice period is 90 days' written notice before either action; shorter notice is permitted only when 90 days is not reasonably practicable (sudden events, emergency circumstances), and market-withdrawal nonrenewals in leased-premises situations trigger longer, more structured notice obligations. The permitted grounds for ending the relationship are a defined list — material franchise breaches, repeated failures to make good-faith efforts, certain criminal conduct, bankruptcy, loss of trademark rights, condemnation, loss of the franchisor's right to grant premises possession, bona fide market withdrawal, or sale of the premises. That list matters because it's exhaustive: a franchisor who can't fit the decision into a recognized ground has no statutory right to terminate or refuse renewal. The statute's remedial structure is built for urgency: PMPA explicitly contemplates preliminary injunctions with a franchisee-favorable standard when serious merits questions exist and hardship favors the franchisee, which is why PMPA disputes frequently become fast-moving federal litigation rather than slower damages cases — an existing franchisee facing imminent termination needs injunctive relief to preserve the business, not just eventual money damages.

How It Affects You

If you operate a branded gas station (Shell, ExxonMobil, BP, Chevron, Valero, or any refiner-branded franchise), the PMPA is your primary federal protection against arbitrary termination or nonrenewal — but it requires you to act quickly when a threat arises. Your franchisor can only terminate or non-renew your agreement if the action fits one of the statute's recognized grounds (material breach, non-payment, loss of trademark rights, bona fide market withdrawal, etc.) and provides at least 90 days' written notice in most cases. If you receive a termination or nonrenewal notice that doesn't fit any statutory ground, or that fails to provide proper notice, file for a preliminary injunction immediately — the PMPA's fast-track injunction standard means courts can act quickly to preserve your franchise relationship, but you typically need to move within days of receiving the notice. Do not assume you can negotiate your way out of a nonrenewal without legal help; the PMPA's 1-year limitations period from the date of termination or nonrenewal starts running fast. For EV infrastructure: if your supplier is conditioning your renewal on EV charger installation, understand whether that constitutes a new franchise obligation outside your original agreement — an unsettled PMPA question that may give you leverage in negotiations. The Service Station Dealers of America (ssda.com) and your state dealer association are resources for connecting with attorneys experienced in PMPA matters.

If you're a refiner, branded fuel supplier, or fuel distributor contemplating termination or nonrenewal of dealer agreements, procedural compliance is as important as substantive grounds. Even when the underlying business reason is entirely legitimate — market withdrawal, chronic non-payment, trademark loss — a failure to provide proper written notice or fitting the termination into a recognized statutory category can expose you to PMPA liability: actual damages, exemplary damages up to $10,000 per violation or 3× actual damages (whichever is greater), plus attorney's fees. "Market withdrawal" — one of the most commonly used nonrenewal grounds — is specifically defined in the statute; it must be a bona fide withdrawal from a geographic market area, not selective nonrenewal of particular dealers. If your nonrenewal strategy targets specific stations while retaining similar stations in the same geography, expect litigation challenging the "geographic" characterization. For network rationalization following a merger or acquisition, have PMPA counsel review your plan before implementing — the inherited franchise portfolio triggers the same statutory protections as directly-originated agreements.

If you're buying or selling a gas station business, franchise document due diligence is essential — and more complex than typical commercial real estate. A branded station involves at least three distinct legal relationships: (1) the franchise/trademark license (governed by PMPA); (2) the fuel supply agreement (often a separate contract); and (3) the real estate (owned, leased from the franchisor, or leased from a third party). Each relationship has its own term, renewal provisions, and assignment rights. PMPA protections belong to the franchisee — the seller — not automatically to the buyer; the franchisor must consent to assignment of the franchise relationship in most structures. A transaction that the seller frames as a simple asset sale may actually require the franchisor's affirmative approval to transfer the trademark license and fuel supply rights. The FTC Franchise Rule requires the franchisor to provide a current Franchise Disclosure Document before any new franchise offer or sale — which in practice means the franchisor needs to be looped in early. For SBA financing, the SBA 7(a) loan program regularly finances gas station acquisitions; lenders want clarity on the franchise assignment before committing funds.

If you're counsel in franchise or commercial litigation involving gas stations, PMPA matters have their own litigation rhythm. The preliminary injunction vehicle — courts are set up to move fast to preserve the franchise relationship — means that PMPA cases often start urgently. The plaintiff's burden for a preliminary injunction under the PMPA is the standard four-part test (likelihood of success on the merits, irreparable harm, balance of equities, public interest), but circuit precedents on the "likelihood of success" standard vary. The statute's definitional framework — what constitutes a "franchise," a "franchise relationship," "marketing premises," and each of the permitted termination grounds — is where most merits disputes live, and circuit court interpretations differ. The federal limitations period (1 year) is shorter than many state commercial statutes; watch for state law claims that the PMPA may preempt (or may not, given its express preemption provision is not unlimited). The International Franchise Association and PLI's franchise law treatises are the standard starting resources for PMPA doctrine.

State Variations

The PMPA is federal law, but state law still matters around the edges:

• State contract, property, and franchise law can supplement issues the PMPA does not preempt
• Some states have dealer-protection statutes that matter outside the PMPA's core termination and renewal rules
• Real-estate, environmental, and landlord-tenant issues around service stations still vary heavily by state
• The PMPA is often the federal floor, not the only law in the dispute

Implementing Regulations

The PMPA itself is primarily statutory and litigation-driven. Unlike some federal commercial statutes, its practical implementation comes more through federal case law than through a large standalone CFR regime.

Pending Legislation (119th Congress)

No major standalone 119th Congress legislation was prominent as of April 2026 to rewrite the PMPA's core termination and nonrenewal framework.

Recent Developments

EV infrastructure is creating new PMPA pressure points. As branded fuel suppliers invest in EV charging networks, some are conditioning franchise renewals on franchisee investment in EV equipment. The legal question: does an EV charging requirement embedded in a renewal offer constitute a new franchise obligation outside the original agreement terms — and if a franchisee refuses, does the supplier's nonrenewal fit the statute's grounds? Courts haven't broadly resolved this, but it's an active issue in franchise negotiations. The IRA's Alternative Fuel Vehicle Refueling Property Credit (up to $100,000 for commercial EV charging equipment) has changed the economics: some franchisees see EV equipment as a business opportunity, while others see the upgrade cost as another example of franchisor leverage over the renewal process.

Fuel-market consolidation is generating nonrenewal disputes. Large refiner mergers and brand acquisitions can put franchisees under pressure when the acquiring company decides to rationalize its inherited franchise network. The PMPA's market-withdrawal provisions allow franchisors to non-renew stations as part of a bona fide withdrawal from a geographic area — with specified notice obligations — but "geographic withdrawal" is a defined statutory standard, not a blank check. When a major acquirer inherits a franchise portfolio and begins network rationalization, multiple PMPA terminations can arise simultaneously, and franchisees in overlapping areas challenge whether a "market withdrawal" is genuinely geographic or merely selective. The antitrust implications of large-brand consolidation also affect the competitive landscape that PMPA franchisees operate in.

The gas station business model has shifted beneath the PMPA's 1978 framework. Today's branded station is primarily a convenience store business — industry data consistently shows that fuel margins run 2-10 cents/gallon while convenience store items carry 40-50% margins. The real economic asset is a high-traffic convenience retail location with a fuel license, not a simple fuel dispensing franchise. This shift means that PMPA disputes increasingly involve fights over high-value convenience retail real estate that happen to have fuel under the franchise banner. Courts applying the 1978 statute's definitions to modern convenience-fuel operations sometimes face difficulty fitting new business models into provisions designed for a pure service-station world.