Summary: This law would require oil companies that are looking to sell or transfer a gas station leased to a dealer to offer a right of first refusal to the small business owner currently running the station. This law is prompted by complaints from Massachusetts franchise owners in contract with Exxon Mobil and currently faced with losing their business.
Why This Matters: This legislation is designed to help local small businesses, providing a level playing field for local gas station dealers working to retain the businesses — in which they’ve invested great amounts of time and money — in the face of opposition from large, out-of-state oil companies.
Over the past year, many oil companies, including Exxon Mobil, announced that they are getting out of the business of owning gas stations. Instead of offering the gas stations for sale to the small business dealers who have run them for years if not decades, these oil companies have declared that the gas stations will be offered to large third-party distributors, in packages of 100 stations. This unilateral decision will have a negative effect on the gas station dealers, who are, by and large, small business owners living in the community they serve.
It could also have a negative effect on the service and pricing of gas for consumers, because of the creation of these mini-monopolies of gas stations across the country, should these stations be sold to large third-party distributors.
Most gas stations are family-run businesses, led by dealers who have made substantial financial investments in their businesses. Any sale without the dealer’s input would leave their futures uncertain and possibly take the business out of the hand of the local owner. What these small business owners are asking for is a simple opportunity to purchase the stations that they have invested so much time and money in over the years.
What this Bill Would Do: This bill that has been filed to guarantee that these dealers who lease their gas stations from large oil companies are allowed to make a competitive offer for the land on which their station sits. This legislation gives the dealers, who currently lease the land, the opportunity to retain some control over the long term future of their business. It gives them the “right of first refusal” when their station is sold, allowing dealers a chance to make a competitive offer for the land their businesses sit on.
Currently, Washington, California, and Connecticut have Right of First Refusal laws. New Jersey has proposed legislation that will be acted on this session.