Three former United Petroleum franchisees are launching legal action against the service station giant, claiming they have been unfairly forced out of their businesses by the franchisor.
One of the franchisees is counter-suing the franchisor, claiming that it engaged in unconscionable conduct, according to the ABC.
Ram Nijhawan and his partner Kirti bought the franchise with the assumption it would change their life and set up their family for a prosperous future.
The Nijhawans invested about $400,000 in a United Petroleum service station franchise in Narre Warren North.
According to the report, United Petroleum loaned the Nijhawans about half of the purchase price, as per court documents.
But the family’s hopes of running a profitable business with the help of their two sons ended in February this year.
“We’re devastated, totally. Financially, emotionally, physically. We have been ruined. We’re finished,” Nijhawan said.
United Petroleum’s chief operating officer David Szymczak said terminating a franchise rarely occurred and was a last resort move.
He said at all times that United Petroleum had abided by its legal and statutory obligations.
In the case of the Nijhawins, it is believed the franchise agreement allowed United Petroleum to terminate due to their repeated failure to pay electricity bills which totalled to near $20,000.
Regarding the allegation of forcing franchisees to purchase products above market prices Szymcsak wrote that “Like many franchise systems … [United] Is permitted to require franchisees to acquire a designated range of goods from approved supplier,” according to the ABC’s report.