On January 19, franchisees had a rare opportunity to be heard by the U.S. Supreme Court. In Mac’s Shell Service, Inc. v. Shell Oil Products, Inc., 63 Shell gas station dealers claimed that their franchisor essentially terminated or did not renew their franchise agreement, an action prohibited by the thirty-year old Petroleum Marketing Practices Act.
Franchisee attorney Robert Salkowski wrote on Blue MauMau in November that the dealers felt Shell Oil " 'embarked on a secret plan to transform their gasoline distribution network' by squeezing the dealers out of the business in order to capture profits then being earned by the independent dealers.” The Miami-based attorney explains that Shell “ . . . began offering the dealers new leases on a take-it-or-leave-it basis that eliminated the rent subsidies, thus dramatically increasing the dealers’ rents.”
Courthouse News reports the Supreme Court Justices’ line of questioning in Tuesday’s hour-long hearing (pdf). The journal summarizes, “Justices appeared reluctant to say a contract is ended if the franchise continues.”