Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—D. Md.: Marketer of motor fuels required to continue sublease with distributor, with limitations, (Sep 1, 2026)

By Sara Cracau, J.D.

The narrow preliminary injunction requires a marketer of motor fuels to continue a sublease with distributor.

The federal district court in Baltimore, Maryland has granted Petroleum Marketing Group, Inc. (PMG) a preliminary injunction as part of PMG’s suit against BP Products North America, Inc., but narrowed the scope of the requested injunction based on questions regarding the validity of non-renewal of a sublease that supported granting an injunction to continue a sublease. PMG established nonrenewal of the franchise relationship, as a precondition for preliminary injunction relief under the Act. The court found that PMG identified sufficiently serious questions regarding whether the notice of the expiration of the sublease comported with the Act. Based on balancing the hardships between the parties, the court found that PMG was entitled to preliminary injunctive relief to continue the sublease. The court found that the order properly binds TA Operating, LLC (TA) which operates and franchises travel centers in multiple states as it is an affiliate of BP, an integrated refiner and marketer of motor fuels and subject to its control as regards the sublease (Petroleum Marketing Group, Inc. v. BP Products North America, Inc., No. 1:26-cv-03084-RDB (D. Md. Aug. 28, 2026)).

Background. PMG brought an action against franchisor BP Products North America (BP) and its affiliate, TA Operating LLC (TA) alleging violations of the Petroleum Marketing Practices Act (the Act) for BP’s allegedly illegal refusal to renew a sublease, under which PG operated certain BP-branded motor fuels businesses and for failure to provide notice of nonrenewal as required by the Act. PMG filed a motion for a preliminary injunction seeking to continue the sublease with TA, in addition to the location-specific trademark licenses and fuel sales. PMG alleged that its sublease with TA was part of its franchise relationship with BP, and, as such, the sublease was subject to the limitations on nonrenewal under the Act. It contended that the nonrenewal was not supported by any of the permissible grounds for nonrenewal under the Act and that BP did not provide the required notice for nonrenewal setting for the grounds for nonrenewal. The sublease provided for a three-year term, ending on August 31, 2026, unless terminated or extended. TA and PMG negotiated and entered into a sublease, with TA as Lessor, and PMG, as Lessee under which PMG paid TA to manage the day-to-day sales to the public and PMG was responsible to coordinate the supply of fuel products for sale at the travel centers. It did not grant or license tot he lessee any right to use trademarks, service marks, and the like. BP was not a party to the sublease.

Nonrenewal of the franchise relationship. The court found that PMG established nonrenewal of the franchise relationship, as a precondition for preliminary injunction relief under the Act. The sublease was an essential element of the franchise agreement. In order to allege a failure to renew a franchise relationship, a franchisee must allege that it is not able to use the franchisor’s trademark, to obtain the franchisor’s motor fuel, or to utilize the franchisor’s service station. Here, nonrenewal of the franchise relationship by not renewing the sublease, PMG would not be able to use BP’s location-specific trademark licenses or continue its operation of the travel centers which BP authorized if the sublease was not renewed. The sublease was a vital element of the franchise under which PMG and BP’s obligations arose. The Act provides that a franchise includes a lease that authorizes a franchisee to sell trademarked goods. Furthermore, the sublease fell within the scope of the Act even though BP’s wholly-owned subsidiary, TA, was the sublessor. The Act’s definition of a franchise extends to an agreement between a refiner franchisor’s affiliate and the franchises which are essential to the franchise. The Act’s definition of “leased marketing premises” confirms that the sublease between TA and BP was a vital component of the franchise. This interpretation comports with the purpose and intent of the Act which must be construed liberally in order to comport with its goal of protecting franchisees.

Sufficiently serious questions relating to the merits of the case. The court found that PMG identified sufficiently serious questions regarding whether the notice of the expiration of the sublease comported with the Act. The parties did not dispute that the letter dated August 15, 2026 was the written notice provided to PMG of the sublease’s expiration on August 31, 2026. This letter did not provide any basis for nonrenewal of the sublease as required by the Act to facilitate assessing whether the nonrenewal was permissible. No other evidence was provided to support a permissible basis for nonrenewal of the sublease.

Balance of hardships. Based on balancing the hardships between the parties, the court found that PMG was entitled to preliminary injunctive relief to continue the sublease. PMG identified hardships that would result to it if the injunction were not granted. It indicated that it would be replaced with another franchisee at the five travel centers that it operated in recent years which would deprive it of income that the centers would generate and would also remove the main consideration that PMG received under the sublease for undertaking conversion responsibilities for another 32 locations and it contended that it would not be able to recoup what it gave to BP for the conversions in exchange for the right to operate the travel centers. On the other hand, BP and TA only cited their lack of control over managing their businesses if the injunction were issued, requiring them to extend a commercial lease. The hardships that would result to PMG if the injunction were not granted were greater than the harm imposed on BP and TA if the injunction was issued.

Scope of the preliminary injunction. The court found that the order properly binds TA Operating, LLC (TA) which operates and franchises travel centers in multiple states as it is an affiliate of BP, an integrated refiner and marketer of motor fuels and subject to its control as regards the sublease. The court’s order narrowed the requested relief so that the preliminary injunction applied only to branded motor fuel at the five travel centers and related agreements protected under the Act. These revisions were required because the Act applies only to franchises for branded motor fuels, and would, therefore, not apply to the parties’ obligations with respect to unbranded fuels. Furthermore, the court declined to exercise its discretion to require posting a bond prior to issuing the preliminary injunction as there was no adequate showing of harm resulting from the injunction to warrant requiring a bond to be posted.

The Case is No. 1:26-cv-03084-RDB.

Judge: Bennett, R.

Attorneys: Alphonse Michael Alfano (Bassman, Mitchell, Alfano & Leiter Chtd) for Petroleum Marketing Group, Inc. Casey Brinks (Tydings & Rosenberg, LLP) for BP Products North America, Inc.

Companies: Petroleum Marketing Group, Inc.; BP Products North America, Inc.

Cases: FranchisingDistribution MarylandNews