Opinion ID: 777182
Heading Depth: 2
Heading Rank: 1

Heading: The Franchise Agreement

Text: 3 In 1984, El-Khoury obtained a franchise service station and convenience store from Chevron. Chevron and El-Khoury had a typical gasoline franchise arrangement. Chevron retained ownership of the facility but leased the station to El Khoury. Chevron licensed its trademarks to El-Khoury and supplied the gasoline sold at the franchise. In return, El-Khoury paid a portion of his sales to Chevron as rent. The agreement between Chevron and El-Khoury consisted of a Dealer Lease, Dealer Supply Contract, and other attached riders and exhibits (collectively, the Dealer Agreements). The Dealer Agreements were renewed regularly. The current Dealer Agreements were executed in March of 1997. 4 In 1996, during negotiations with its many franchisees to renew the Dealer Agreements, Chevron sought to include a specific reference to its right to audit tax returns and schedules. 2 Dealers objected to this provision. In response to those objections, Chevron eliminated the reference to tax records. Instead, the final Dealer Agreements provide more generally that Chevron has the right to audit all books and records relevant to Dealer's operation of the premises. The Dealer Agreements also include a general provision in which the dealer agrees to comply with all applicable Federal, state and local laws and regulations relevant to the use and operation of the premises.