MEMORANDUM OPINION AND ORDER – PAGE 1 

 IN THE UNITED STATES DISTRICT COURT 

 NORTHERN DISTRICT OF TEXAS 

 DALLAS DIVISION 

SASORO 13, LLC, § 

 § 

 Plaintiff, § 

 § 

v. § Civil Action No. 3:18-CV-03274-N 

 § 

7-ELEVEN, INC., § 

 § 

 Defendant. § 

 MEMORANDUM OPINION AND ORDER 

 This order addresses Defendant 7-Eleven, Inc.’s motion to dismiss all of Plaintiff 

Sasoro 13, LLC’s (“Sasoro”) claims [28]. The Court concludes that Sasoro has failed to 

state a claim upon which relief can be granted and thus grants 7-Eleven’s motion. Further, 

because the Court dismisses Sasoro’s claims, Sasoro’s outstanding motions1

 relating to its 

previous application for preliminary injunction are moot. 

I. THE TERMINATION OF SASORO’S 7-ELEVEN FRANCHISE

 Sasoro, owned by Henri and Ester Sas, operates a 7-Eleven gas station franchise in 

Las Vegas, Nevada. Am. Compl. ¶ 7 [25]. Under the current version of the parties’ 

franchise agreement (the “Agreement”), 7-Eleven retained discretion to terminate the 

Agreement in various circumstances, including immediately and without opportunity to 

cure in the event that Sasoro failed to comply with its terms on four or more separate 

1

 Plaintiff’s Motion for Leave to File an Appendix with Its Reply Supporting Its 

Application for Preliminary Injunction [46]; Motion to Reconsider Orders Unfiling 

Plaintiff’s Application for Preliminary Injunction and Reply Supporting Its Application for 

Preliminary Injunction [53]. 

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MEMORANDUM OPINION AND ORDER – PAGE 2 

occasions within a two-year period. Id. ¶ 17; App. Supp. Defs.’ Mot. Dismiss, Ex. A [30], 

Agreement § 26(a)(10). Between December 2021 and July 2022, 7-Eleven issued Sasoro 

ten Notices of Material Breach for alleged noncompliance such as late and missing cash 

reports and refusing 7-Eleven access to the premises. Defs.’ Answer & Third Party 

Compl., Ex. B, Notices of Material Breach & Termination Notices 21, 24 [27-2].2

 On 

October 10, 2022, 7-Eleven notified the Sases that it was exercising its right pursuant to 

section 26(a)(10) to terminate the Agreement, effective one week later. Id. 20–25. 

 Sasoro initiated this litigation, and the parties are currently under an agreed 

temporary restraining order [41]. Sasoro’s Amended Complaint asserts claims for 

declaratory judgment, breach of contract, violations of Article 23

 of the Texas Uniform 

Commercial Code4

 (“UCC”), the Petroleum Marketing Practices Act5 (“PMPA”), and the 

Texas Deceptive Trade Practices Act6

 (“DTPA”). 7-Eleven has moved to dismiss pursuant 

to Federal Rule of Civil Procedure 12(b)(6). 

2

 A district court may properly consider contracts or other documents that are not attached 

to the complaint, but that are referenced within it and attached to a defendant’s Rule 

12(b)(6) motion. See Inclusive Cmtys. Proj., Inc. v. Lincoln Prop. Co., 920 F.3d 890, 900 

(5th Cir. 2019). 7-Eleven’s brief supporting its motion to dismiss cites to the “compilation 

of the ten breach notices” attached to its counterclaim. Defs.’ Br. Supp. Mot. Dismiss 10 

n.2 [29]. 

3

 The Amended Complaint does not invoke specific provisions of the Texas UCC, but 

Sasoro appears to invoke Article 2 by claiming coverage because under the Agreement, it 

purchases 7-Eleven’s branded goods. ¶ 58; see supra Part V. 

4

 Codified at TEX. BUS. & COM. CODE ANN. §§ 2.101, et seq. 5

 Codified at 15 U.S.C. §§ 2801, et seq.

6

 Codified at TEX. BUS. & COM. CODE ANN. §§ 17.01, et seq. 

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MEMORANDUM OPINION AND ORDER – PAGE 3 

II. THE LEGAL STANDARD FOR A RULE 

 12(B)(6) MOTION TO DISMISS

 When addressing a motion to dismiss pursuant to Federal Rule of Civil Procedure 

12(b)(6), a court must determine whether the plaintiff has asserted a legally sufficient claim 

for relief. Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995). “When 

reviewing a motion to dismiss, a district court must consider the complaint in its entirety, 

as well as . . . documents incorporated into the complaint by reference, and matters of 

which a court may take judicial notice.” Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 

2011) (internal quotation marks omitted). Thus, a district court may properly consider 

contracts or other documents that are not attached to the complaint, but that are referenced 

within it and attached to a defendant’s Rule 12(b)(6) motion. See Inclusive Cmtys. Proj., 

Inc. v. Lincoln Prop. Co., 920 F.3d 890, 900 (5th Cir. 2019). 

 A viable complaint includes “enough facts to state a claim to relief that is plausible 

on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). To meet this 

standard, a plaintiff must “plead[ ] factual content that allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 

Iqbal, 556 U.S. 662, 678 (2009). A court generally accepts well-pleaded facts as true and 

construes the complaint in the light most favorable to the plaintiff. Gines v. D.R. Horton, 

Inc., 699 F.3d 812, 816 (5th Cir. 2012). But a plaintiff must provide “more than labels and 

conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 

Twombly, 550 U.S. at 555 (internal citations omitted). “Factual allegations must be enough 

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MEMORANDUM OPINION AND ORDER – PAGE 4 

to raise a right to relief above the speculative level . . . on the assumption that all the 

allegations in the complaint are true.” Id. (internal citations omitted). 

III. SASORO CONCEDES THAT ITS DECLARATORY 

JUDGMENT AND DTPA CLAIMS FAIL

 Sasoro concedes that the declaratory judgment and DTPA counts are duplicative of 

its other contractual claims and seeks to withdraw them. Pl.’s Br. Opp. Mot. Dismiss 2 n.1 

[47]. Accordingly, the Court dismisses Sasoro’s claims for declaratory judgment of its 

rights under the Agreement and violations of the DTPA. 

IV. THE COURT DISMISSES THE BREACH 

OF CONTRACT CLAIM

 Neither party disputes that Texas law governs the Agreement. See Agreement 

§ 30(a). “Under Texas law, a plaintiff alleging a breach of contract must establish (1) the 

existence of a valid contract; (2) that the plaintiff performed or tendered performance; (3) 

that the defendant breached the contract; and (4) that the plaintiff was damaged as a result 

of the breach.” Pegram v. Honeywell, Inc., 361 F.3d 272, 288 (5th Cir. 2004) (citing Runge 

v. Raytheon E–Systems, Inc., 57 S.W.3d 562, 565 (Tex. App. — Waco 2001, no pet.)). 

 Sasoro’s theory of breach relies primarily on the implied covenant of good faith and 

fair dealing. However, for common law breach of contract claims, “[i]t is well established 

that Texas courts do not recognize an implied duty of good faith and fair dealing ‘unless 

intentionally created by express language in a contract or unless a special relationship of 

trust and confidence exists between the parties to the contract.’” TBK Consulting, Inc. v. 

Dex Media, Inc., 2018 WL 11434567, at *4 (N.D. Tex. 2018) (quoting Lovell v. W. Nat. 

Life Ins. Co., 754 S.W.2d 298, 302 (Tex. App. — Amarillo 1988, writ denied)). 

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 The Agreement lacks a provision explicitly incorporating the covenant, and Texas 

courts have held that the “special relationship” cause of action “does not extend to ordinary 

commercial contractual relationships.” Central Sav. & Loan Ass'n v. Stemmons N.W. Bank, 

N.A., 848 S.W.2d 232, 239 (Tex. App. — Dallas 1992, no writ). Indeed, the Texas 

Supreme Court has declined to extend special relationship status to the franchisorfranchisee context. Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84. S.W.3d 212, 

225 (Tex. 2002) (citing Crim Truck & Tractor Co. v. Navistar Int’l Transp. Corp., 823 

S.W.2d 591, 595–96 (Tex. 1992) (superseded in part by a statute now repealed, TEX. REV.

CIV. STAT. art. 4413(36), § 6.06(e))). Sasoro has not pled facts implicating the implied 

covenant of good faith and fair dealing. 

 Further, Sasoro’s allegations do not support its conclusion that 7-Eleven lacked 

authority to terminate the Agreement. Sasoro concedes that it violated several contractual 

terms, but it argues that it cured some breaches and that others were immaterial. See

Greene v. Farmers Ins. Exch., 446 S.W.3d 761, 767 (Tex. 2014) (“[O]ne party is excused 

from performing under a contract only if the other party commits a material breach.”). 

However, section 26(a)(10) of the Agreement explicitly states that post-notification 

corrections do not absolve Sasoro of noncompliance for purposes of the four-strike limit, 

and its scope is not limited to only “material” violations; rather, section 26(a) explains that 

the occurrence of four instances of any noncompliance within two years is itself a material 

breach. Sasoro admits that it: (1) unilaterally postponed at least one audit in June 2022, 

Am. Compl. ¶ 24; (2) failed to maintain the required minimum net worth in November 

2021, id. ¶ 26; (3) repeatedly submitted cash reports late in 2021, id. ¶¶ 27–28; and (4) 

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refused to meet with 7-Eleven’s field consultant in 2021. See Notices of Material Breach 

& Termination Notices 6; Am. Compl. ¶ 30. Sasoro contends that the termination violates 

section 13(d)(2), setting out Sasoro’s minimum net worth requirements, and section 14, 

reserving 7-Eleven’s audit rights, but has not explained how. Thus, even taking Sasoro’s 

allegations as true, the Amended Complaint supports 7-Eleven’s grounds to terminate the 

Agreement pursuant to section 26(a)(10). 

 Because Sasoro has not sufficiently pled a term of the Agreement that 7-Eleven 

allegedly breached, its common law breach of contract claim fails. 

V. THE COURT DISMISSES THE TEXAS 

UCC ARTICLE 2 CLAIM

 The general duty of good faith and fair dealing does apply to contracts covered by 

the Texas UCC. TEX. BUS. & COM. CODE ANN. § 1.304. However, Article 2 of the Texas 

UCC applies to only the sale of goods. Id. § 2.102; see also Koehler v. Sears, Roebuck & 

Co., 2001 WL 611453, at *4 (Tex. App. — Dallas 2001, no pet.), overruled on other 

grounds, Nghiem v. Sajib, 567 S.W.3d 718, 719–20 (Tex. 2019). When a contract relates 

to both goods and services, Texas courts consider “the essence or dominant factor of the 

transaction.” Koehler, 2001 WL 611453, at *4. Whether the sale of goods or rendition of 

services predominates is a question of law. See, e.g., id.; Swire Pac. Holdings, Inc. v. Dr. 

Pepper/Seven-Up Corp., 1997 WL 153794, at *5 (Tex. App. — Dallas 1997, no pet.). 

 In Swire Pacific Holdings, a Texas appellate court considered a franchise agreement 

that “granted Swire rights in connection with the distribution of Seven-Up products.” 1997 

WL 153794, at *1. The court reasoned that although Seven-Up sold Swire the syrups used 

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to make their soft drinks, “the syrups alone would be useless to Swire without” the licensing 

of the Seven-Up trademark. Id. at *4. “Because of the importance of the non-sales 

aspects,” the Swire court concluded that services rather than goods were the “essence” of 

the contract. Id. 

Similarly here, the heart of the transaction is Sasoro’s use of 7-Eleven’s trademark. 

Though Sasoro purchases branded goods from 7-Eleven under the Agreement, Am. Compl. 

¶ 58, it does so in connection with its contractual rights to use the 7-Eleven name. The 

essence of the Agreement is not goods, but services, and Article 2 of the Texas UCC does 

not apply. Accordingly, Sasoro’s Texas UCC claim fails. 

VI. THE COURT DISMISSES THE PMPA CLAIM

 The PMPA was enacted in “response to widespread concern over increasing 

numbers of allegedly unfair franchise terminations and nonrenewals in the petroleum 

industry.” Mac’s Shell Serv., Inc. v. Shell Oil Prods. Co., 559 U.S. 175, 178 (2010). It 

protects covered franchisees by prohibiting early termination or nonrenewal except in 

specific circumstances. Farm Stores, Inc. v. Texaco, Inc., 763 F.2d 1335, 1339 (11th Cir. 

1985) (citing 15 U.S.C. §§ 2802, 2804). The PMPA applies to any contract between: 

(i) a refiner and a distributor, 

(ii) a refiner and a retailer, 

(iii) a distributor and another distributor, or 

(iv) a distributor or a retailer, 

under which a refiner or distributor (as the case may be) authorizes or permits 

a retailer or distributor to use, in connection with the sale, consignment, or 

distribution of motor fuel, a trademark which is owned or controlled by such 

refiner or by a refiner which supplies motor fuel to the distributor which 

authorizes or permits such use. 

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15 U.S.C. § 2801(1)(A). For Sasoro to invoke the protections of the PMPA, it must 

satisfy the definition of either a retailer or a distributor. 

 A covered retailer is “any person who purchases motor fuel for sale to the general 

public for ultimate consumption.” Id. § 2801(7). Under the Consigned Gasoline 

Amendment (“Amendment”) to the Agreement, Sasoro did not purchase fuel from 7-

Eleven. App. 249. Instead, 7-Eleven retained title to the gasoline until the moment of sale, 

and Sasoro earned a set commission. Id. App. 249–51. Thus, Sasoro is not a retailer within 

the meaning of the PMPA. 

 A covered “distributor” is “any person” who “purchases motor fuel for sale, 

consignment, or distribution to another” or “receives motor fuel on consignment for 

consignment or distribution to his own motor fuel accounts or to accounts of his supplier.” 

15 U.S.C. §§ 2801(6)(A)–(B). Again, because Sasoro does not purchase gasoline from 7-

Eleven, it does not satisfy the first definition of a distributor. 

 Longstanding precedent makes clear that the second definition of a distributor does 

not encompass an entity that receives fuel on consignment for sale to the public. See Farm 

Stores, Inc., 763 F.2d at 1341 (holding that the plaintiff was not a distributor because “the 

public purchase[d] motor fuel at [its] location for consumption and the distributor 

definition involves consignment which applies only to wholesale operations”); Johnson v. 

Mobil Oil Corp., 553 F. Supp. 195, 198 (S.D.N.Y. 1982) (“The legislative history makes 

clear that in defining a ‘distributor’ who operates under a consignment, Congress had in 

mind an independent middleman acting as a jobber, not a dealer selling to the public at 

retail.”). 

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 In Chatila v. Aranco Oil Corp., another district court assessed facts similar to those 

at issue here. 2003 WL 1145501 (D.N.H. 2003). The franchisee in Chatila also did not 

purchase or own the gasoline, and instead the franchisor “owned the pumps and tanks, 

supplied the gasoline to the pumps, and set the price for gasoline.” Id. at *1. The court 

first found that the arrangement was indeed a consignment structure. Id. at *3 (citing 

Black’s Law Dictionary 307 (6th ed. 1990)). The court then considered it significant that 

only the first half of section 2801(6) includes distributors who obtain fuel for the purpose 

of sale. 2003 WL 1145501, at *3–4. Concluding that the structure of the statute 

contemplates the sale of fuel as distinct from its distribution, the court held that “[u]nder 

the plain meaning of § 2801(6)(B), a person is not a distributor if the person receives fuel 

on consignment for retail sale.” Id. at *4. 

 For the same reasons, Sasoro is also a consignee rather than a purchaser of gasoline. 

See Farm Stores, Inc., 763 F.2d at 1340 (holding that the plaintiff was not a purchaser of 

gasoline because, in part, it did not pay for or take title to the gasoline, bear risk of loss, 

retain funds from sale, or set prices). And because the consignment was for retail sale 

rather than distribution to other fuel accounts, Sasoro does not satisfy the PMPA’s second 

definition of a distributor. The parties’ franchise agreement is thus not covered by the 

statute, and Sasoro’s PMPA claim accordingly fails. 

CONCLUSION

 Because Sasoro has failed to state a claim upon which relief can be granted, the 

Court grants 7-Eleven’s motion. The Court dismisses Sasoro’s claims without prejudice 

and grants leave to amend. If it can do so in a manner consistent with this opinion, Sasoro 

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may file a Second Amended Complaint within thirty (30) days of the date of this order. 

This order does not address 7-Eleven’s counterclaims contained within its Answer and 

Third Party Complaint. 

 Signed February 27, 2023. 

 ___________________________ 

 David C. Godbey 

 Chief United States District Judge 

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