Gas station/convenience store franchisees testify to BP’s alleged abuses

Current and former franchisees of ARCO and AMPM gas station/convenience stores have presented their testimony in a trial alleging that BP’s improper pricing policy cost them $1.65 million. Oil giant BP used to own the ARCO gasoline brand and still franchises AMPM stores. In a group of related lawsuits, franchisees allege that BP required them to purchase supplies from vendors that sent kickbacks to BP and that BP interfered with franchisees trying to sell their stores, among other claims.

A Los Angeles County jury is now deliberating on the suit, Hogan v. BP West Products LLC, which was filed in 2011 and is being treated as a “bellwether” case, which means the legal findings and outcome of the trial could influence the other pending lawsuits against BP involving dozens of franchisees from several western states.

Key allegations in the complaint filed in 2011 include:

  • BP required franchisees to use approved vendors, which cost each plaintiff tens or hundreds of thousands of dollars because of inflated prices and kickbacks to BP.
  • BP forced franchisees to buy a defective point-of-sale and inventory-control system that cost franchisees up to $35,000 each. BP’s franchisees allege that the system overcharged some customers, didn’t charge others, and periodically crashed.
  • BP interfered with some franchisees’ efforts to sell their stores to punish franchisees who complained about the company’s practices.

In addition to the charges in the 2011 complaint, the franchisees have presented testimony on allegations that BP overcharged franchisees for gas – including in some cases selling gas to competing stations more cheaply than to its own franchisees.

“Franchisees not only are standing up for their rights against corporate greed, but protecting their customers against gas price fixing and unfair business practices of the oil companies,” wrote Ali Mazarei, vice president of the Service Stations Franchisee Association, which represents gas station/convenience store operators. “After all, the small local franchisees are taking on the fourth largest company in the world. Not even the US government could take BP to court after the oil spill that affected millions of lives. But franchisees ARE!”