New Jersey Operators Gain Right of First Refusal


New Jersey Governor Corzine has signed into law the First Right of Refusal Act, which prevents the sale of gas stations to mega distributors without first offering the operating franchisees the opportunity to purchase the property.


Last fall, the New Jersey gasoline c-store and automotive association (NJGCA) and small business franchise dealers learned that Exxon and Shell were seeking to quickly divest their retail assets in New Jersey. Big Oil planned to bundle multiple gas station properties together and sell them in a single package, which would deny current lessees the chance to own the site their businesses were built on.


A few years ago Exxon dealers in South Jersey faced the same situation when a mega-distributor purchased a package of 60 locations from Exxon, raised the dealer’s rents, and sold them gasoline at un-competitive prices, making it nearly impossible for them to remain profitable and forcing them to turn in their keys, the reported. NJGCA asked the government to take action so the same situation did not occur.


The First Right of Refusal Act gives franchisees the right to purchase their own stations in any assignment, transfer or sale of a franchised location. Franchisees will not have any special rights under a sale, any special discount for equity invested in the premise or any other tool, which can be used to make franchisees the preferred purchaser. The legislation only states that the premise at an amount equal to or greater than any other offer must be offered to the owner of the franchise premise first.


The bill was sponsored by Senators Cardinale and Sarlo, and Assemblymen Diegnan, Bramnick, Chivukula and Ramos. The bill overwhelmingly passed both houses of the Legislature on May 21.





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