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BP Franchisees File Class Action Lawsuit
By Kimberly Mirando
A group of 15 ARCO, BP and AmPm franchise owners have filed a class action lawsuit against BP, claiming the gas giant manipulates gas supplies and prices in order to deliver more gas when gas prices are high. It also alleges BP required its franchisees to install a defective point-of-sale system that hurt their business and brought customer complaints.
The lead Plaintiff in the BP class action lawsuit claims the company sold the Plaintiffs ARCO-branded gas stations “on the notion that ARCO has been and would continue to be known for its low-priced gasoline strategy as compared to other national brands, mainly due to an early 1980s decision to emphasize cost cuts for cash-only policy at its fuel pumps.” However, the franchisees claim BP harmed them in numerous ways, including:
(1) Manipulating gas supplies and prices, so as to maximize the wholesale price of gasoline. “For example, when oil future prices are trending down (signifying lower prices in the days ahead), BP Defendants deliver more gas at the higher current price; and when oil future prices are trending up (signifying higher prices ahead), BP Defendants deliver less gas in order to wait to deliver gas when prices rise later,” the class action lawsuit states. Furthermore, it adds, BP manipulates gas pricing “by delivering gas before or after price increases or decreases that serve to increase the sales price charged to franchisees.”
(2) Forcing franchise owners install a new centralized POS system, developed and installed by co-defendant Retalix LTD, which is defective, resulting in substantial damages to franchise owners through lost operation time, lost revenue, lost or inaccurate inventory, lost receivables and cash, and increased operating costs and burdens;
(3) BP’s direct control of and/or pricing by third-party vendors, which results in unreasonable increased costs to franchisees;
(4) BP’s policy of forcing sale of items and collection of fees for which Plaintiffs receive no compensation;
(5) BP’s unreasonable and untimely approvals and or denials to buy or sell franchise locations and unreasonable restrictions placed on lenders, which lowers market value of the franchises; and
(6) BP’s failure to properly spend all collected amounts for advertising and promotion.
The BP franchisee class action lawsuit is brought on behalf of all ARCO, BP and/or Am/Pm franchisees. It is seeking all legal and equitable remedies, including the removal of Retalix and installation of an adequate new POS system, statutory penalties, punitive damages, attorneys’ fees, costs and interest.
A copy of the BP Gas Station Franchisee Class Action Lawsuit can be read here. The case is Green Desert Oil Group, Inc., et al. v. BP West Coast Products, LLC, et al.
Updated May 13th, 2011
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